Exhibit 10.6
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT dated March 19, 2002.
BETWEEN:
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(the "Executive")
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HUB INTERNATIONAL LIMITED, a corporation
incorporated pursuant to the laws of Ontario
("Hub International")
In consideration of the mutual covenants and agreements contained herein,
the parties hereto agree as follows.
1. INTERPRETATION
(1) In this Agreement:
(a) "Agreement" means this agreement, all schedules attached hereto
and any amendments made to any of the foregoing by written
agreement between the Executive and Hub International;
(b) "Basic Compensation" means the compensation defined in Schedule
"B";
(c) "Benefits" means the benefits defined in Schedule "B";
(d) "Bonus" means the bonus defined in Schedule "B";
(e) "Cause" means (i) a material breach by the Executive of the
provisions of this Agreement, which breach shall not have been
cured by the Executive within thirty (30) days following written
notice thereof by Hub International to the Executive, (ii) the
commission of gross negligence by the Executive in the course of
the Executive's employment, which commission has a material
adverse effect on Hub International, (iii) the commission by the
Executive of a criminal act of fraud, theft or dishonesty causing
material damages to Hub International, (iv) the Executive's
conviction of (or plead of nolo contendere to) any felony, or
misdemeanor involving moral turpitude if such misdemeanor results
in material financial harm to or materially adversely affects the
goodwill of Hub International, (v) any breach by the Executive of
the Confidentiality, Non-Solicitation and Insider Agreement of
even date
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herewith, or (vi) such other act or omission that a court of
competent jurisdiction declares in a written ruling to be a
breach of the Executive's responsibilities hereunder of such
materiality as to justify a termination of the Executive's
employment by Hub International;
(f) "Confidentiality, Non-Solicitation and Insider Agreement" means
the Executive Confidentiality, Non-Solicitation and Insider
Agreement entered into by the parties hereto, of even date
herewith;
(g) "Current Location" means Hub International's executive offices at
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(h) "Death" means a natural death and, in addition, is deemed to
include a continuous period of at least ninety (90) consecutive
business days during which time the Executive has not been in the
offices of Hub International during normal working hours and the
Executive's whereabouts are unknown to Hub International;
(i) "Disability" means the mental or physical state of the Executive
is such that the Executive would qualify for disability benefits,
in accordance with Hub International's group benefits insurance
policy at the relevant time;
(j) "Good Reason" means (i) the breach of the terms of this Agreement
by Hub International or any successor thereto, excluding any
inadvertent breach that is rectified within a reasonable period
of time under the circumstances; (ii) the direct or indirect
assignment to the Executive of any duties or reporting
responsibilities, materially inconsistent with the Services (as
contemplated as of the date hereof or in any mutually-agreed
written amendment hereto) (excluding any isolated and inadvertent
assignment that is remedied by Hub International within thirty
(30) days after receipt of notice from the Executive); (iii) a
reduction in the Executive's Basic Compensation or a reduction in
the Benefits that is not reimbursed; (iv) any failure by Hub
International to require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all
or substantially all of the business and/or assets of Hub
International to assume expressly and agree to perform the
provisions of this Agreement in the same manner and to the same
extent that Hub International would be required to perform if no
such succession had taken place; (v) the failure by Hub
International to continue to provide the Executive with the
Benefits; (vi) the relocation of the Current Location to a
location that is outside a thirty-five (35) mile radius of the
Current Location, unless such new location is no further than the
Current Location is from the Executive's then current residence.
(k) "Hub International" means Hub International Limited;
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(l) "Restricted Stock Plan" means a restricted stock purchase plan
that includes substantially the same terms as those set out in
Schedule "D" attached hereto that is generally applicable to
senior employees or consultants with companies of The Hub Group
who are resident in the United States;
(m) "Schedule" means a schedule to this Agreement;
(n) "Section" means a section or subsection of this Agreement;
(o) "Services" means the duties and the responsibilities set out in
Schedule "A", as the same may be amended or extended by mutual
agreement of the parties from time to time;
(p) "Subsidiaries" means the "subsidiary companies," as defined in
the Securities Act (Ontario), of Hub International;
(q) "The Hub Group" means Hub International and the Subsidiaries; and
(r) "Vacation" means the vacation to which Executive is entitled, as
contemplated in Schedule "B".
(2) It is agreed by and between the parties hereto that the Schedules
referred to herein, as itemized below and attached hereto, shall form
a part of this Agreement and this Agreement shall be construed as
incorporating such Schedules:
Schedule "A" - Services
Schedule "B" - Basic Compensation, Benefits and Vacation
Schedule "C" - Alternative Dispute Resolution
Schedule "D" - Restricted Stock Plan
2. EMPLOYMENT
(1) Hub International agrees to employ the Executive for the purpose of
providing the Services, and the Executive accepts such employment.
(2) During the term of the Executive's employment with Hub International,
the Executive agrees to devote the whole of the Executive's business
time and attention to the provision of the Services in a conscientious
and competent manner and with the utmost integrity.
(3) The Executive shall perform the Services primarily at the Current
Location. Subject to reimbursement for related expenses in accordance
with Section 3(3) and subject to Section 4, it is understood and
agreed that the Executive may be called upon, on occasion, to travel
outside of the City of Chicago on behalf of Hub International, but
that the Executive shall not be required to move his residence from
the Chicago area as a condition of this Agreement.
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3. REMUNERATION AND BENEFITS
(1) Hub International shall pay the Executive the Basic Compensation and
Benefits (as applicable) in such payment periods as are established
from time to time by Hub International for its employees, subject to
deduction and remittance to the appropriate governmental authority of
all applicable taxes and other amounts.
(2) The Executive shall be entitled to and Hub International shall provide
the Benefits.
(3) Hub International shall reimburse the Executive for reasonable travel
and other business expenses incurred by the Executive in performing
the Services, in accordance with approved budgets.
(4) The Executive shall be entitled to the Vacation, to be scheduled at
the mutual convenience of the parties.
(5) The Executive shall be entitled to the rights set out in Schedule "D"
in connection with the Restricted Stock Plan which Hub agrees to
implement as soon as reasonably practicable having regard to all the
circumstances, including the requirements of applicable law and any
shareholder consent that may be required.
(6) The Executive shall be paid a Bonus, if any, in accordance with
Schedule "B".
4. TERM AND TERMINATION
(1) The parties acknowledge that the Executive has been employed by Hub
International since the commencement date set out in Schedule "A" and
agree that this Agreement codifies the existing arrangements regarding
the Executive's employment.
(2) This Agreement and the employment of the Executive hereunder shall be
for an indefinite term, subject to termination in accordance with the
terms of this Agreement.
(3) This Agreement and the employment of the Executive may be terminated
by Hub International for any reason whatsoever upon prior written
notice to the Executive, or by the Executive for Good Reason upon
written notice to Hub International, provided that, in the event that
the Agreement is terminated in accordance with this Section 4(3), the
Executive shall, subject to deduction and remittance to the
appropriate governmental authority of all applicable taxes and other
amounts, be paid:
(a) the Basic Compensation and entitled to receive the Benefits for
the period up to the effective date of termination; and
(b) (i) an amount equal to twelve (12) months' Basic Compensation;
(ii) a ratable portion, based on the days elapsed in the then
current year to the effective date of termination, of an amount
equal to the most recent prior Bonus paid to the Executive; and
(iii) the value of the group insurance and automobile benefits or
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allowance components of the Benefits, all on a semi-monthly basis
over the ensuing twelve (12) months,
provided that in the event that the Executive breaches any of the
provisions of the Confidentiality, Non-Solicitation and Insider
Agreement, effective as at the date of such breach the Executive shall
cease to be entitled to any further payment under Section 4(3)(b) or
by way of any other damages, compensation or pay in lieu of notice;
and provided further that in no event shall the Executive be paid an
amount that is less than the prescribed minimum under applicable
employment standards legislation.
(4) Notwithstanding Sections 4(2) and 4(3)(b), this Agreement may be
terminated immediately by Hub International, for Cause, without
further obligation to the Executive, provided that the Executive shall
be entitled to receive an amount equal to the Basic Compensation and
the Benefits to the date of termination.
(5) Notwithstanding Sections 4(2) and 4(3)(b), this Agreement may be
terminated by Hub International on notice to the Executive due to the
Disability of the Executive, upon ninety (90) days' written notice to
the Executive, provided that the Executive shall be entitled to
receive an amount equal to the Basic Compensation and the Benefits to
the effective date of termination.
(6) Notwithstanding Section 4(2) and 4(3), this Agreement shall be
terminated immediately upon the Death of the Executive or, unless
otherwise agreed by the parties, upon the Executive's attaining
sixty-five (65) years of age, provided that the Executive shall be
entitled to receive an amount equal to the Basic Compensation and the
Benefits to the effective date of termination.
(7) In the event of termination of this Agreement in accordance with the
terms hereof, the provisions of the Confidentiality, Non-Solicitation
and Insider Agreement shall continue in full force and effect.
5. DISPUTE RESOLUTION
Subject to, and without diminishing, the rights of the corporations of The
Hub Group to seek and obtain equitable relief in accordance with the provisions
of the Confidentiality, Non-Solicitation and Insider Agreement, the parties
agree to submit any disputes to mediation in accordance with the procedures set
out in Schedule "C".
6. GENERAL PROVISIONS
(1) In the event any payment, distribution or other benefit received by
the Executive under this Agreement or any other contract or
arrangement (including, but not limited to, any acceleration of the
ability to exercise any stock option or the vesting of any stock or
other property or any payment made to the Executive in connection with
a change of control of Hub International or any severance payment
provided herein) (a "Payment") would be subject to the excise tax
imposed by section 4999
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of the Internal Revenue Code of 1986 (such excise tax, together with
any similar tax under any new or replacement provision to such Section
4999, are hereinafter collectively referred to as the "Excise Tax"),
including any payment, distribution or other benefit that when
aggregated with any other payment, distribution or other benefit
(whether or not such is received or made pursuant to this Agreement)
results in the imposition of the Excise Tax, then the Executive shall
be entitled to receive an additional payment (a "Gross-Up Payment") in
an amount such that after payment by the Executive of all taxes,
including without limitation, any Excise Tax or other tax imposed upon
any amounts received under this Section 6(1), the Executive retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Payment. All determinations required to be made under this Section
6(1), including whether and when a Gross-Up Payment is required and
the amount of such Gross-Up Payment and the assumptions to be utilized
in arriving at such determination, shall be made by Hub
International's independent accounting firm which shall provide
detailed supporting calculations both to Hub International and the
Executive within fifteen (15) business days of the receipt of notice
from the Executive that there has been or will be a Payment, or such
earlier time as is requested by Hub International.
(2) The provisions hereof, when the context permits, shall enure to the
benefit of and be binding upon the heirs, executors, administrators
and legal personal representatives of the Executive and the successors
and assigns of Hub International, respectively.
(3) This Agreement shall be construed in accordance with the laws of the
State of Illinois.
(4) If any covenant or provision of this Agreement is determined to be
void or unenforceable, in whole or in part, it shall not be deemed to
affect or impair the validity of any other covenant or provision of
this Agreement. However, if any of the provisions of or covenants
contained in this Agreement are hereafter construed to be invalid or
unenforceable in any jurisdiction, the same shall not affect the
remainder of the provisions or the enforceability thereof in any
jurisdiction, which shall be given full effect, without regard to the
invalid portions or the unenforceability in such other jurisdiction.
If any of the provisions of or covenants contained in the
Confidentiality, Non-Solicitation and Insider Agreement are held to be
unenforceable in any jurisdiction because of the duration or scope
thereof, the parties agree that the court making such determinations
shall have the power to reduce the duration and/or scope of such
provision or covenant and, in its reduced form, said provision or
covenant shall be enforceable; provided, however, that the
determination of such court shall not affect the enforceability of the
provisions of the Confidentiality, Non-Solicitation and Insider
Agreement in any other jurisdiction.
(5) Any notice, demand, request, consent, approval or waiver required or
permitted to be given hereunder shall be in writing and may be given
to the party for whom it is intended by personally delivering it to
such party or by mailing the same by prepaid registered mail:
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(a) In the case of Hub International, to:
Hub International Limited
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Attention: General Counsel
(b) In the case of the Executive, to the Executive's last known
address.
Any such notice or other documents delivered personally shall be
deemed to have been received by and given to the addressee on the day
of delivery and any such notice or other documents mailed, as
aforesaid, shall be deemed to have been received by and given to the
addressee on the third (3rd) business day following the date of
mailing. Any party may at any time give notice to the other of any
change of address.
(6) All amounts referred to herein are in United States currency unless
otherwise indicated.
IN WITNESS THEREOF the parties hereto have hereunto executed this Agreement
as of the day and year first above written.
HUB INTERNATIONAL LIMITED
By:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman and Chief Executive Officer
I have authority to bind the corporation.
SIGNED AND DELIVERED in the presence of: )
)
/s/ W. ▇▇▇▇ ▇▇▇▇▇
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(Signature) )
)
W. ▇▇▇▇ ▇▇▇▇▇ ) /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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(Print Name) ) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
)
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SCHEDULE "A"
COMMENCEMENT DATE
The Executive's employment with Hub International commenced on November 30,
1998. The parties agree that the Employment Agreement dated November 30, 1998
between the parties is terminated upon the date of this Agreement and is
hereafter superceded by this Agreement.
SERVICES
The Executive shall report to the Board of Directors and the Chief Executive
Officer of Hub International. The Executive shall perform such reasonable duties
as shall assigned from time to time in connection with the Executive's position
as President and Chief Operating Officer of Hub International (the "Services").
SCHEDULE "B"
BASIC COMPENSATION
o Annual salary of $300,000.00 (the "Basic Compensation")
BONUS
o The Executive shall be paid such annual bonus (the "Bonus"), if any, as may
declared by Hub International's Compensation Committee (the "Compensation
Committee") in its sole discretion, of an amount not to exceed $200,000.00.
The Compensation Committee shall determine the amount of the Bonus, if any,
taking into consideration not only the Executive's individual performance,
but also Hub International's performance as a company relative to its
growth and profitability targets for the applicable year. The Bonus, if
any, shall be paid to the Executive on or before March 15 of the year
immediately following the year in respect of which it is declared payable,
subject to deduction and remittance to the appropriate governmental
authority of all applicable taxes and other amounts. The Executive
Committee may develop for the Executive such performance-based criteria as
may be necessary and are reasonable to take into consideration in order to
allow Hub International to deduct as an expense all remuneration, including
any Bonus, paid to the Executive under this Agreement in the applicable
year.
BENEFITS
o Group insurance (including medical, extended health, dental, short and long
term disability and life insurance) and such other benefits as are made
available to employees of Hub International, provided that the Executive
qualifies for coverage under such plans.
o Automobile allowance of $750.00 per month.
o Matching contribution by Hub International on the Executive' behalf to Hub
International's employee 401(k) retirement savings plan equal to 3% of the
Executive's Basic Compensation, subject to applicable law.
VACATION
The Executive shall be entitled to a maximum of four (4) weeks' vacation per
year to be scheduled at the mutual convenience of the parties (the "Vacation").
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SCHEDULE "C"
ALTERNATIVE DISPUTE RESOLUTION
o Disputes will be submitted to mediation before a mediator in Chicago,
Illinois, as a condition precedent to the initiation of litigation by any
party to this Agreement; provided, however, that any party may seek
injunctive relief in a court of competent jurisdiction to preserve the
status quo pending the completion of mediation. The mediator shall be
chosen by mutual agreement of the parties; provided, however, that if the
parties are unable to agree upon a mediator within ten (10) days, they
shall each, within the further period of five (5) days, choose a mediator
and the two mediators shall choose, within the ensuing period of ten (10)
days a separate and independent mediator who shall then serve as the sole
mediator for the purposes of this Schedule "C". If either party fails to
name a mediator within the further period of five (5) days aforesaid, the
mediator chosen by the other party shall serve as the sole mediator for the
purposes of this Schedule "C".
o At such time as a dispute shall arise that is submitted to mediation, each
of the parties shall execute such mediation agreement in such form as shall
then be used by the chosen mediator or mediation firm for such purposes and
shall join in a request that the mediator provide an evaluation of the
parties' cases and of the likely resolution of the dispute if not settled.
The cost of the mediator and mediation shall be borne equally by the
parties.
o In the event that one party to this Agreement is willing to accept the
mediator's proposed resolution of the dispute, if any, but the other party
(the "Contesting Party") is not so willing, the Contesting Party may elect
to pursue a claim in a court of competent jurisdiction. In the event that
the final determination of the rights of the Contesting Party by such court
of competent jurisdiction is less advantageous to the Contesting Party than
the mediator's proposed resolution of the dispute, the Contesting Party
shall be deemed to have agreed to pay the other party's costs and expenses
of litigation of such claim(s), including reasonable attorneys' fees.
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SCHEDULE "D"
RESTRICTED STOCK PLAN
o The Executive shall receive units (the "Units") allowing the Executive to
acquire up to 35,817 common shares under the Restricted Stock Plan (the
"Awarded Shares"), subject to the following terms:
o The terms of the Units (including number) shall be adjusted or
modified, from time to time, to take into account any stock splits,
stock dividends or other changes or adjustments occurring with respect
to the common shares of Hub International.
o No payment of cash consideration will be required to acquire the
Awarded Shares.
o Fifty percent (50%) of the Units shall be exercisable on the fifth
(5th) anniversary of the commencement date set out in Schedule "A"
(the "Commencement Date") and the remaining Units shall be exercisable
on the tenth (10th) anniversary of the Commencement Date, provided
that all unexercised Units shall immediately be exercisable upon
normal retirement or upon termination without Cause or for Good
Reason. Units will be exercisable pro rata in the event of Death or
Disability (that is, at the rate of 10% per year). Subject to the
foregoing, the Executive shall forfeit any unexercised Units in the
event of Death or Disability or if the Executive's employment is
terminated by Hub International for Cause or by the Executive without
Good Reason.
o The parties acknowledge that the Restricted Stock Plan is currently under
design and, when in final form, may be subject to the approval of the
shareholders of Hub International. Accordingly, the provisions of the
Restricted Stock Plan and the Units may be modified from those set out
above to accommodate applicable laws, regulatory requirements and tax
considerations.
o The parties acknowledge and agree that the Executive's loan in the
principal amount of US$397,147.00 with Bank of Montreal related to the
52,444 shares currently allocated to the Executive under Hub
International's Executive Share Purchase Plan will be paid by Hub
International provided that the Executive is continuously employed by Hub
International for the period of ten (10) years from the Commencement Date.