Exhibit 10.19
HILB, ▇▇▇▇▇ AND ▇▇▇▇▇▇▇▇ COMPANY
Employment Agreement With
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into as of this 1st day of July,
1999, by and between ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, an individual residing in Pittsburgh,
Pennsylvania (the "Executive"), and HILB, ▇▇▇▇▇ AND ▇▇▇▇▇▇▇▇ COMPANY, a Virginia
corporation with corporate offices located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ (the "Company").
WHEREAS, the Board of Directors of the Company (the "Board") desires
that the Company employ the Executive as the Senior Vice President - Business
and Product Development of the Company, and the Executive desires to accept such
position with the Company, all on the terms and subject to the conditions set
forth herein;
NOW, THEREFORE, in consideration of the promises and covenants
contained herein, and intending to be legally bound hereby, the parties hereto
agree as follows:
I. Term Of Employment.
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(A) The term of the employment of the Executive under this
Agreement shall commence on the signing of this Agreement, and shall continue
thereafter for a two (2) year period.
(B) Upon the commencement of this Agreement as set forth above,
and notwithstanding the two (2) year term provided in provision (A) of this
Section I, the term of employment of the Executive under this Agreement shall be
subject to earlier termination by:
(1) the determination of disability of the Executive
pursuant to Section IV; or
(2) the dismissal of the Executive from his position as
Senior Vice President - Business and Product Development pursuant to
resolution by the Board, or failure or refusal of the Board to re-elect
the Executive to the position of Senior Vice President - Business and
Product Development or some greater office; or
(3) the 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" (as defined in Section
V(A)), Section V(B) shall apply;
(iii) in the event of termination pursuant to
Paragraph (2) above without "Proper Cause" (as defined in
Section V(A)), Section VI shall apply; and
(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.
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The Company agrees to continue to employ the Executive as the Senior
Vice President - Business and Product Development of the Company, subject to the
terms, conditions and provisions of this Agreement, and the Executive hereby
accepts such employment. The Executive agrees that his employment as Senior Vice
President - Business and Product Development 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 (which approval will not be unreasonably withheld).
III. Compensation.
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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.
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The Company shall pay the Executive an annual base salary of $306,000,
payable in twenty-four (24) equal semi-monthly installments. This annual base
salary shall be reviewed annually by the Compensation Committee of the Board
(the "Compensation Committee") to consider appropriate increases, but in no
event shall the amount of the base salary be reduced.
(B) Annual Incentive Bonus.
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In addition to the base salary to be paid to the Executive under
Section III(A), the Executive may also be entitled to an annual incentive bonus
as established and modified, from time to time, by the Compensation Committee.
The bonus may include a mutually agreed performance bonus for leadership of the
Financial Institutions Group.
(C) Ancillary Benefits.
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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.
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(D) The Executive shall receive such stock option awards each year
as determined by the Compensation Committee in its sole discretion.
IV. Disability.
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(A) The term of employment of the Executive may be terminated at
the election of the Company upon a determination by the Board, 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 Senior Vice President - Business and Product Development 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 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 for these purposes.
If the Executive's personal physician disagrees with the physician retained by
the Company, the Board 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, and shall otherwise cooperate with the Board 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.
(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 officers.
V. Termination For Proper Cause.
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(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:
(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;
(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;
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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.
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(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), on a prorated basis if such termination is
mid-month or mid-year, 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 two (2) year term of employment established by
Section I(A). In the event of a dispute as to whether the Executive was
terminated for or without "Proper Cause," or regarding the amount of
compensation the 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), for the remainder of the term of this Agreement, the
Company shall make to the Executive (or his estate or designated beneficiary) an
annual (prorated on a calendar year basis for any partial year) payment equal to
the greater of the (i) highest annual incentive bonus payment received by
Executive pursuant to Section III(B) during the term of this Agreement, or (ii)
fifty percent (50%) of his annual base salary.
VII. Death.
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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, and shall
have no further obligation hereunder thereafter.
VIII. Confidentiality.
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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,
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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.
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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.
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(A) For the purpose of this Agreement, the following terms shall
have the following meanings:
(1) "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
direct and indirect subsidiary corporations of Hilb, ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇
Company 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, and services 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, and
premium financing related thereto;
(4) "Prospective Customers" shall be limited to those
persons and entities known by the Executive to have been solicited for
business with respect to 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; and
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(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 have substantial contact with, and/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.
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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.
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XII. Remedies Upon Employee Breach of Agreement.
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(A) If the Executive materially breaches any provision of this
Agreement and fails to cure any such material breach within thirty (30) 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 thirty (30) 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, or XI of this Agreement. 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 Section 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
Section 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.
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(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) calendar days after a final order is entered by an 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 NationsBank, N.A. 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.
XIII. Tolling of Restrictive Covenants During Violation.
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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.
XIV. Notices.
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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:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chairman of the Board
(B) If to the Executive, to him at the following address:
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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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.
XV. Governmental Regulation.
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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.
XVI. Arbitration.
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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. The arbitrator shall have the
authority to grant any equitable, including, without limitation, injunctive
relief, and any other legal remedies that would be available in any judicial
proceeding, and any award rendered therein 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. The arbitration provisions of this Agreement
shall survive any termination or expiration of this Agreement.
XVII. Indemnification by the Company.
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The Company shall defend, indemnify and hold harmless the Executive
against any and 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.
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XVIII. Governing Law.
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As the headquarters of the Company are located in the Commonwealth of
Virginia and the Executive provides substantial services therein, and related
thereto, this Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Virginia.
IX. Severability.
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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 this
Agreement as a whole or any part thereof, other than the specific portion
declared to be invalid.
XX. Non-Assignable by Executive.
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The Agreement and the benefits and obligations herein shall expressly
be non-assignable by the Executive.
XXI. Headings.
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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.
XXII. Successors and Assigns.
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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.
XXIII. Entire Agreement.
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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/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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ATTEST: HILB, ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇
COMPANY
/s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: President and Chief Executive Officer
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