HILB, ▇▇▇▇▇ AND ▇▇▇▇▇▇▇▇ COMPANY
Employment Agreement With
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EMPLOYMENT AGREEMENT
THIS AGREEMENT, effective the 1st day of June, 1997, by and
between ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, an individual residing in the County of
Henrico, Virginia (the "Executive"), and HILB, ▇▇▇▇▇ AND ▇▇▇▇▇▇▇▇
COMPANY, a Virginia corporation with corporate offices located at
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ (the "Company").
WHEREAS, the Company has promoted the Executive to the
position of Chief Executive Officer of the Company and wants to
assure itself of the benefit of the Executive's services and
experience; and
WHEREAS, the Executive has assumed the position of Chief
Executive Officer and is willing to continue in the employ of the
Company upon the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the premises and
covenants contained herein, and intending to be legally bound
hereby, the parties hereto agree as follows:
I. Term Of Employment.
(A) The term of the employment of the Executive under this
Agreement shall be for a five year period commencing on June 1,
1997, and ending on May 31, 2002.
(B) Notwithstanding the foregoing provision (A) of this
Section I., the term of employment of the Executive under this
Agreement shall be subject to earlier termination by:
(1) determination of disability of the Executive
pursuant to Section IV.; or
(2) dismissal of the Executive from his position as
Chief Executive Officer pursuant to resolution by the Board
of Directors of the Company, or failure or refusal of the
Board of Directors to re-elect the Executive to the position
of Chief Executive Officer; or
(3) death of the Executive;
provided, however, that
(i) in the event of termination for
determination of disability pursuant to Paragraph (1)
above, Section IV. shall apply;
(ii) in the event of termination pursuant to
Paragraph (2) above for "Proper Cause" (defined in
Section V.(A)), Section V.(B) shall apply;
(iii) in the event of termination
pursuant to Paragraph (2) above without "Proper Cause"
(defined in Section V.(A)), Section VI. shall apply; or
(iv) in the event of termination due to the
death of the Executive pursuant to Paragraph (3) above,
Section VII. shall apply.
II. Services To Be Rendered.
The Company agrees to employ the Executive as the Chief
Executive Officer of the Company, subject to the terms,
conditions and provisions of this Agreement. The Executive
hereby accepts such employment and agrees that he shall devote
the same degree of skill and diligence in rendering services to
the Company under this Agreement as he applied during his prior
employment by the Company. The Executive shall report to and be
subject to the direction of the Board of Directors of the
Company. The Executive agrees that his employment as Chief
Executive Officer of the Company pursuant to this Agreement is a
full time position. Notwithstanding the foregoing, the Executive
may devote a reasonable amount of his time to serving as an
officer and director of other companies affiliated with the
Company; to his personal investments and business affairs,
including service as a director of unaffiliated companies; and to
civic, political and charitable activities; provided however, the
Executive shall not accept any position as a director of any
unaffiliated for-profit business organization, other than
positions presently held by him, without prior approval of the
Board of Directors of the Company (which approval will not be
unreasonably withheld).
III. Compensation.
In consideration for the services rendered to the Company
under this Agreement, the Company shall pay and provide to the
Executive the following compensation and benefits:
(A) Salary.
The Company shall pay the Executive an annual base salary of
$400,000.00, payable in twelve equal monthly installments on the
last business day of each calendar month. This annual base
salary shall be reviewed annually by the Compensation Committee
of the Board of Directors (the "Compensation Committee") to
consider appropriate increases, but in no event shall the amount
of the base salary be reduced.
(B) Annual Incentive Bonus.
In addition to the base salary to be paid to the Executive
under Section III.(A), the Executive shall also be entitled to an
annual incentive bonus as established and modified, from time to
time, by the Compensation Committee.
(C) Ancillary Benefits.
The Executive shall also be entitled to vacations,
participation in the Company's Profit Sharing Savings Plan (401K)
and Supplemental Executive Retirement Plan, sick leave benefits,
post-retirement benefit plan, and all other ancillary benefits
provided by the Company, including, but not limited to, group
life, health and disability insurance coverages, consistent with
the compensation policies and practices of the Company from time
to time prevailing with respect to persons who are executive
officers of the Company.
(D) The Executive shall receive such stock option awards
each year as determined by the Compensation Committee in it's
sole discretion.
IV. Disability.
(A) The term of employment of the Executive may be
terminated at the election of the Company upon a determination by
the Board of Directors of the Company, made based upon a
qualified medical opinion, that the Executive will be unable, by
reason of physical or mental incapacity, to perform the
reasonably expected or customary duties of Chief Executive
Officer of the Company on a full-time basis for a period longer
than three (3) consecutive months or more than six (6) months in
any consecutive twelve (12)-month period. In the exercise of its
determination, the Board of Directors shall give due
consideration to the opinion of the Executive's personal
physician or physicians and to the opinion of any physician or
physicians selected by the Board of Directors for these purposes.
If the Executive's personal physician disagrees with the
physician retained by the Company, the Board of Directors will
retain an impartial physician selected by the Executive's
personal physician and the Company's physician and the opinion of
the impartial physician shall be binding upon the Company and the
Executive. The Executive shall submit to examination by any
physician or physicians so selected by the Board of Directors,
and shall otherwise cooperate with the Board of Directors in
making the determination contemplated hereunder, such cooperation
to include, without limitation, consenting to the release of
information by any such physician(s) to the Board of Directors.
(B) In the event of such termination for disability, the
Company shall thereupon be relieved of its obligations to pay any
compensation and benefits under Section III., except for accrued
and unpaid items, but shall, in addition, pay to the Executive
such disability compensation as set forth in any disability plan
established by the Company for its executive offices.
V. Termination For Proper Cause.
(A) The occurrence of any of the following events shall
constitute "Proper Cause" for termination of the employment of
the Executive under this Agreement, at the election of the Board
of Directors of the Company:
(1) the Executive shall voluntarily resign as a
director, officer or employee of the Company or any of its
affiliates without the written consent of the Board of
Directors of the Company;
(2) the Executive shall breach this Agreement in any
material respect and fail to cure such breach within sixty
(60) calendar days after receiving written notice of such
breach from the Company; or
(3) the commission of a fraud, or other criminal act,
by the Executive directly involving the Company or any of
its affiliates which would constitute a felony if prosecuted
under criminal law;
provided, however, the inability of the Executive to
achieve favorable results of operations shall clearly not be
deemed Proper Cause for termination hereunder.
(B) In the event of termination of the Executive's
employment pursuant to Section I.(B)(2) for Proper Cause, the
Company shall thereupon be relieved of its obligations to pay any
compensation and benefits under Section III., except for accrued
and unpaid items.
VI. Termination Without Proper Cause.
(A) In the event of termination of the Executive pursuant
to Section I.(B)(2) without Proper Cause (as defined in Section
V.(A) above), the Company shall thereafter be and remain
obligated to pay to the Executive (or his estate or designated
beneficiary) the compensation and benefits provided under Section
III.(A) and III.(B) and such benefits under III.(C) as are
payable to a terminated employee until expiration of the five
year term of employment established by Section I.(A). In the
event of a dispute as to whether Executive was terminated for or
without "Proper Cause," or regarding the amount of compensation
Executive is entitled to receive under this Section VI., the
Company shall be obligated to continue to pay to the Executive
(or his estate or designated beneficiary) all of the compensation
and benefits reserved under Section III. until the dispute is
resolved by an arbitrator pursuant to Section XVIII. hereof.
(B) For purposes of calculating the annual incentive bonus
payable under Section III.(B), the Company shall make to the
Executive (or his estate or designated beneficiary), an annual
payment equal to the greater of the (i) highest annual incentive
bonus payment received by Executive pursuant to Section III.(B)
for the term of this Agreement, or (ii) the sum of $100,000.00.
VII. Death.
In the event of termination of the Executive's employment
pursuant to Section I.(B)(3) above, the Company shall pay the
Executive's estate or designated beneficiary such death benefits
as may be set forth in any life insurance plan established by the
Company for its executive officers.
VIII. Confidentiality.
For purposes of this Agreement, "Confidential Information"
shall mean any information of a proprietary or confidential
nature and trade secrets of the Company and its affiliates
relating to the business of the Company and its affiliates that
have not previously been publicly released by duly authorized
representatives of the Company. The Executive agrees to regard
and preserve as confidential all Confidential Information
pertaining to the Company's business that has been or may be
obtained by the Executive in the course of his employment with
the Company, whether he has such information in his memory or in
writing or other physical form. The Executive shall not, without
written authority from the Company to do so, use for his personal
benefit or his personal purposes, unrelated to business of the
Company, nor disclose to others, either during the term of his
employment hereunder or for two (2) years thereafter, except as
required by the conditions of his employment hereunder, any
Confidential Information of the Company. This provision shall
not apply after the Confidential Information has been voluntarily
disclosed to the public by a duly authorized representative of
the Company, independently developed and disclosed by others, or
otherwise enters the public domain through lawful means.
IX. Removal Of Documents Or Objects.
The Executive agrees not to remove from the premises of the
Company, except as an employee of the Company in pursuit of the
business of the Company or any of its affiliates, or except as
specifically permitted in writing by the Company, any document or
object containing or reflecting any Confidential Information of
the Company. The Executive recognizes that all documents or
material containing Confidential Information developed by him or
by someone else in the course of employment by the Company, are
the exclusive property of the Company.
X. Nonpiracy Covenants.
(A) For the purpose of this Agreement, the following terms
shall have the following meanings:
(1) "HRH Customers" shall be limited to those
customers of the Company or its affiliates for whom there is
an insurance policy or bond in force or to or for whom the
Company or its affiliates are rendering services as of the
date of termination of the Executive's employment;
(2) "Affiliates of the Company" shall mean each of the
subsidiary corporations of Hilb, ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Company
engaged in business as an insurance agency as of the date of
termination of the Executive's employment;
(3) "Prohibited Services" shall mean services in the
fields of insurance performed by the Company or its
affiliates, their agents or employees in any other business
engaged in by the Company or its affiliates on the date of
termination of the Executive's employment. "Fields of
Insurance" does not include title insurance, but does
include all lines of insurance sold by the Company or its
affiliates, including, without limitation, property and
casualty, life, group, accident, health, disability, and
annuities;
(4) "Prospective Customers" shall be limited to those
parties known by the Executive to have been solicited for
business within any Prohibited Service within the twelve
(12) month period preceding the date of termination of the
Executive's employment, and with or from whom, within the
twelve (12) month period preceding the date of termination
of the Executive's employment, someone acting on behalf of
the Company or its affiliates either had met for the purpose
of offering any Prohibited Service or had received a written
response to an earlier solicitation to provide a Prohibited
Service;
(5) "Restricted Period" shall mean the period of two
(2) years immediately following the date of termination of
the Executive's employment.
(B) The Executive recognizes that over a period of many
years the Company has developed, at considerable expense,
relationships with, and knowledge about, Customers and
Prospective Customers which constitute a major part of the value
of the Company. During the course of his employment by the
Company, the Executive will either have substantial contact with,
or obtain substantial knowledge about, these Customers and
Prospective Customers. In order to protect the value of the
Company's business, the Executive covenants and agrees that, in
the event of the termination of his employment, but only if said
termination is voluntary or for Proper Cause, he shall not,
directly or indirectly, for his own account or for the account of
any other person or entity, as an owner, stockholder, director,
employee, partner, agent, broker, consultant or other participant
during the Restricted Period:
(1) solicit a Customer for the purpose of providing
Prohibited Services to such Customer;
(2) accept an invitation from a Customer for the
purpose of providing Prohibited Services to such Customer;
(3) solicit a Prospective Customer for the purpose of
providing Prohibited Services to such Prospective Customer;
and
(4) accept an invitation from a Prospective Customer
for the purpose of providing Prohibited Services to such
Prospective Customer.
Subsections (1), (2), (3), and (4) are separate and
divisible covenants; if for any reason any one covenant is held
to be illegal, invalid or unenforceable, in whole or in part, the
remaining covenants shall remain valid and enforceable and shall
not be affected thereby. Further, the periods and scope of the
restrictions set forth in any such subsection shall be reduced by
the minimum amount necessary to reform such subsection to the
maximum level of enforcement permitted to the Company by the law
governing this Agreement. Additionally, the Executive agrees
that no separate geographic limitation is needed for the
foregoing nonpiracy covenants as such are not a prohibition on
the Executive's employment in the insurance agency business and
are already limited to only those entities which are included
within the definition of "Customer" and "Prospective Customer."
XI. Nonraiding of Employees.
The Executive covenants that during his employment hereunder
and the Restricted Period specified in Section X. hereof, but
only if said termination is voluntary or for proper cause, he
will not solicit, induce or encourage for the purposes of
employing or offering employment to any individuals who, as of
the date of termination of the Executive's employment, are
employees of the Company or its affiliates, nor will he directly
or indirectly solicit, induce or encourage any of the Company's
or its affiliates' employees to seek employment with any other
business, whether or not the Executive is then affiliated with
such business.
XII. Notification of Former and New Employment.
During the term of this Agreement and the Restricted Period
specified in Section X. hereof, but only if the termination of
employment by the Executive is voluntary or with Proper Cause,
the Executive covenants to notify any prospective employer or
joint venturer, which is a competitor of the Company of this
Agreement with the Company; and if the Executive accepts
employment or establishes a relationship with such competitor,
the Executive covenants to notify the Company immediately of such
relationship. If the Company reasonably believes that the
Executive is affiliated or employed by or with a competitor of
the Company during the Restricted Period, after termination of
his employment voluntarily or with Proper Cause, then the
Executive grants the Company the right to forward a copy of this
Agreement to such competitor.
XIII. Remedies Upon Employee Breach of Agreement.
(A) If the Executive materially breaches any provision of
this Agreement and fails to cure any such material breach within
sixty (60) days after written notice of said material breach is
received from the Company, the Company reserves the right to
avail itself of any reasonable remedy available to it at law or
in equity. Further, if the Executive fails to cure any such
material breach after sixty (60) days from receipt of written
notice of the material breach, the Company may, at its sole
option, employ reasonable disciplinary procedures against the
Executive for any material breach, up to and including discharge.
The Executive acknowledges and agrees that the Company shall be
entitled to injunctive relief against the Executive for any
material violation by the Executive of Sections VIII. IX., X.,
XI., or XII. of this Agreement which the Executive fails to cure
within sixty (60) days after receipt of written notice from the
Company. The Executive agrees that the foregoing remedies shall
be cumulative and not exclusive, shall not be waived by any
partial exercise or nonexercise thereof and shall be in addition
to any other remedies available to the Company at law or in
equity.
(B) Notwithstanding the foregoing, if the Executive
materially breaches Sections IX. or X. of this Agreement, the
Company may, at its sole option, seek liquidated damages with
respect to each Customer or Prospective Customer procured by or
through the Executive, directly or indirectly, in violation of
Sections IX. or X. of this Agreement (with such Customers being
hereafter referred to as "Lost Customers" and with such
Prospective Customers being hereafter referred to as "Lost
Prospects"). The Executive acknowledges that it would be
difficult to calculate damages incurred by the Company in the
event of such a material breach and that the following liquidated
damages clause, when so elected by the Company, is necessary and
reasonable for the protection of the Executive. The Company
agrees that, if it elects to exercise the liquidated damages
provision with respect to a Lost Customer or Lost Prospect, it
shall not seek an injunction with respect thereto if the
Executive pays such liquidated damages. The Executive also
acknowledges that the Company may or may not choose to exercise
this liquidated damages provision and that the Company may, at
its sole option, seek injunctive relief with respect to some Lost
Customers and Lost Prospects and liquidated damages with respect
to other Lost Customers and Lost Prospects. Finally, the
Executive acknowledges that he has no right whatsoever to force
the Company to exercise this liquidated damages provision, and
that such choice remains entirely the Company's. Liquidated
damages shall be calculated as follows:
(1) A Lost Customer shall be valued at 150% of the
gross revenue to the Company in the most recent twelve (12)
month period preceding the date of loss of such account. If
such Lost Customer had not been a Customer of the Company
for an entire twelve (12) month period, such liquidated
damages shall be 150% of the gross revenue which would have
been, in the absence of a material breach by the Executive,
realized by the Company in the initial twelve (12) month
period of such Customer being served by the Company. A Lost
Prospect shall be valued at 150% of the gross revenue
realized in the initial twelve (12) month period of such
Lost Prospect being served by any one or more persons or
entities receiving such revenue as a direct result of the
Executive's material breach.
(2) The Executive acknowledges that the foregoing
damage amounts are fair and reasonable, that an industry
rule of thumb for the valuation of any agency is 150% of
revenue and that, on the margin, selected accounts may be
worth much more than 150% of their annual revenue to an
agency.
(C) The Executive shall pay such liquidated damages to the
Company within ninety (90) business days after a final order is
entered by the Arbitrator and received by the Executive ordering
the Executive to make such payment. Thereafter, such liquidated
damages shall bear interest at the prime rate of interest in
effect at the Bank of Virginia. The Executive acknowledges that
a broker of record letter granted during the Restricted Period,
if applicable, by a Customer or Prospective Customer in favor of
the Executive or any person or entity with whom or which the
Executive is directly affiliated shall be prima facie evidence of
a violation of Section X. of this Agreement and establishes a
rebuttable presumption in favor of the Company that Section X. of
this Agreement has been violated by the Executive. Further, the
Executive acknowledges that if the Restricted Period is
applicable to him, he has an affirmative duty to inform such
Customer or Prospective Customer that he cannot accept its
business until after the Restricted Period and that he must
minimize all contact with such Customer or Prospective Customer.
XIV. Tolling of Restrictive Covenants During Violation.
If a material breach by the Executive of any of the
restrictive covenants of this Agreement occurs, the Executive
agrees that the restrictive period of each such covenant so
materially violated shall be extended by a period of time equal
to the period of such material violation by the Executive. It is
the intent of this Section that the running of the restricted
period of a restrictive covenant shall be tolled during any
period of material violation of such covenant so that the Company
shall get the full and reasonable protection for which it
contracted and so that the Executive may not profit by his
material breach.
XV. Merger, Consolidation or Sale.
The Company intends to provide certain anti-takeover
protections to its executives in the next twelve (12) months.
Executives shall receive protections at that time commensurate
with his position with the Company.
XVI. Notices.
All notices and other communications which are required or
may be given under this Agreement shall be in writing and shall
be deemed to have been given if delivered personally or sent by
registered or certified mail, return receipt requested, postage
prepaid:
(A) If to the Company, to it at the following address:
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Attn: Chairman of the Board
(B) If to the Executive, to him at the following address:
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▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire
Marcus & Shapira, LLP
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or to such other place as either party shall have specified by
notice in writing to the other. A copy of any notice or other
communication given under this Agreement shall also be sent to
the Secretary and the Treasurer of the Company addressed to such
officers at the then principal office of the Company.
XVII. Governmental Regulation.
Nothing contained in this Agreement shall be construed so as
to require commission of any act contrary to law and whenever
there is any conflict between any provision of this Agreement and
any statute, law, ordinance, order or regulation, the latter
shall prevail, but in such event any such provision of this
Agreement shall be curtailed and limited only to the extent
necessary to bring it within the legal requirements.
XVIII. Arbitration.
Any dispute or controversy as to the interpretation,
construction, application or enforcement of, or otherwise arising
under or in connection with this Agreement, shall be submitted at
the request of either party hereto for mandatory, final and
binding arbitration in the City of Richmond, Virginia, in
accordance with the commercial arbitration rules then prevailing
of the American Arbitration Association. The Company and
Executive waive the right to submit any controversy or dispute to
a Court and/or a jury. Any award rendered therein shall provide
the full remedies available to the parties under the applicable
law and shall be final and binding on each of the parties hereto
and their heirs, executors, administrators, successors and
assigns and judgment may be entered thereon in any court having
jurisdiction. The prevailing party in any such arbitration shall
be entitled to an award by the arbitrator of all reasonable
attorneys' fees and expenses incurred in connection with the
arbitration.
XIX. Indemnification by the Company.
The Company shall defend, indemnify and hold harmless the
Executive against any all claims, causes of actions, damages and
expenses (including all legal fees and expenses) in any
threatened, pending or completed action, arising out of or
relating in any way to action or conduct by the Executive by
reason of the fact that he was a representative of the Company or
was serving at the request of the Company or acts or conduct
within the course of his employment pursuant to this Agreement or
in his capacity as a director of the Company. If the Company
contends that any action or conduct by the Executive was not
within the course of his employment or is otherwise not subject
to this provision, the Company shall pay to the Executive all
defense costs and expenses to defend such an action and shall
only be entitled to reimbursement of such fees and expenses if
after a final adjudication, including all available appeals,
there is a holding that the Executive was not entitled to the
defense and indemnification under this provision.
XX. Governing Law.
This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia.
XXI. Divisibility.
Should an arbitrator declare any provision of this Agreement
to be invalid, such declaration shall not affect the validity of
the remaining portion of any such provision or the validity of
any other term or provision of the Agreement as a whole or any
part thereof, other than the specific portion declared to be
invalid.
XXII. Headings.
The headings to the Sections and Paragraphs of this
Agreement are for convenience of reference only and in case of
any conflict the text of this Agreement, rather than the
headings, shall control.
XXIII. Successors and Assigns.
This Agreement is binding upon and shall inure to the
benefit of the successors and assigns of the Company and the
heirs, executors and legal representatives of the Executive.
XXIV. Entire Agreement.
This Agreement contains the entire understanding of the
parties with respect to the subject matter contained herein and
supersedes all prior agreements, arrangements and understandings
relating to the subject matter and may only be amended by a
written agreement signed by the parties hereto or their duly
authorized representatives.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
WITNESS:
__/s ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
______/s ▇▇▇▇▇▇ ▇. Rogal____________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
ATTEST: HILB, ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇
COMPANY
_/s ▇▇▇▇▇▇ ▇. Fox___
By:___/s ▇▇▇▇▇▇ ▇. Faccenda_________
Its: Chairman of the Compensation
Committee of the Board of
Directors
0341685.02