Exhibit 10.13
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT made as of JANUARY 1, 2002.
B E T W E E N:
R. CRAIG BARTON, BUSINESSMAN, OF 44843 SOUTH SUMAS ROAD,
IN THE DISTRICT OF CHILLIWACK, IN THE PROVINCE OF
BRITISH COLUMBIA; V2R 4A7;
(THE "EXECUTIVE")
- AND -
BARTON INSURANCE BROKERS LTD., A BODY CORPORATE, DULY
INCORPORATED UNDER THE LAWS OF THE PROVINCE OF
BRITISH COLUMBIA;
(THE "BROKER")
- AND -
HUB INTERNATIONAL LIMITED, A CORPORATION INCORPORATED
PURSUANT TO THE LAWS OF ONTARIO;
("THE HUB")
In consideration of the mutual covenants and agreements contained
herein, the parties hereto agree as follows:
1. INTERPRETATION
(a) "AGREEMENT" means this agreement, all Schedules attached hereto
and the amendments made hereto by written agreement between the
Executive and the Broker;
(b) "BASIC COMPENSATION" means the compensation indicated in
SCHEDULE "B";
(c) "BENEFITS" means the benefits to which the Executive is entitled
in accordance with SCHEDULE "B";
(d) "DEATH" means a natural death and, in addition, is deemed to
include a continuous period of at least SIX (6) MONTHS during
which time the Executive has not been in the offices of the
Broker during normal working hours and the Executive's
whereabouts are unknown to the Broker;
(e) "DISABILITY" means the mental or physical state of the Executive
is such that the Executive would be considered to suffer from a
"total disability" or a "disability" or to be "totally disabled"
or "disabled" in accordance with the Broker's group benefits
insurance policy at the relevant time;
(f) "SCHEDULE" means a schedule to this Agreement;
(g) "SECTION" means a section or subsection to this Agreement;
(h) "SERVICES" means the duties and the responsibilities set out in
SCHEDULE "A" to this Agreement, as the same may be amended or
extended by agreement of the parties from time to time;
(i) "SUBSIDIARIES" means the "subsidiary companies", as defined in
the SECURITIES ACT (Ontario), of The Hub, including the Broker;
(j) "THE HUB" means Hub International Limited;
(k) "THE HUB GROUP" means The Hub and the Subsidiaries; and
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(l) "VACATION" means the vacation to which Executive is entitled, as
contemplated in SCHEDULE "B".
1.2 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
2. EMPLOYMENT
2.1 The Broker agrees to employ the Executive and the Executive accepts
such employment and represents to the Broker that the Executive has the required
skills and expertise to perform the Services.
2.2 During the term of the Executive's employment with the Broker the
Executive agrees to devote the whole of the Executive's business time and
attention to the Services in a conscientious and competent manner and with the
utmost integrity.
2.3 The Executive shall perform the Services primarily at the office of the
Broker at such locations as the Broker's and The Hub's reasonable needs may
dictate from time to time.
3. REMUNERATION AND BENEFITS
3.1 The Executive shall be paid the Basic Compensation in such payment
periods as are established from time to time by the Broker for its employees,
subject to deduction and remittance to the appropriate governmental authority of
all applicable taxes and other amounts.
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3.2 The Executive shall be entitled to and the Broker shall provide the
Benefits.
3.3 The Broker shall reimburse the Executive for reasonable travel and
other business expenses incurred by the Executive in performing the Services, as
approved in advance by the Broker.
3.4 The Executive shall be entitled to the Vacation, to be scheduled at
the mutual convenience of the parties.
4. PROPRIETARY, CONFIDENTIALITY AND NON-SOLICITATION
4.1 PROPERTY. The Executive acknowledges and agrees that all books of
business, policies of insurance, documents, computer records, vouchers and other
books, papers and records connected with the business of The Hub Group, whether
paid for, serviced or produced by the respective corporation of The Hub Group or
not, are the property of the respective corporation and shall be at all times
open to the respective corporation for the purposes of examination, and shall be
turned over and surrendered to the respective corporation or its representatives
upon the order of the respective corporation or on the termination of the
Executive's employment with the Broker of any reason whatsoever.
4.2 CONFIDENTIALITY. The Executive acknowledges that in the course of
carrying out the Executive's duties to the Broker, the Executive will have
access to and will be entrusted with confidential information concerning the
business and corporate affairs of the Broker, the other corporations of The Hub
Group and their clients ("Confidential Information"), including information
pertaining to the respective corporation's relationship with insurance carriers,
employee and producer compensation structures, client underwriting and policy
renewal information, internal accounting procedures, policies and information,
unique insurance product features, insurance programs developed by the
respective corporation (with or without the assistance of the Executive),
marketing strategies and employee training procedures. The Executive agrees that
all Confidential Information
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acquired by the Executive or disclosed to the Executive shall be held in the
strictest confidence. The Executive shall not disclose any Confidential
Information to any other person during the term of the Executive's employment or
at any time thereafter without the prior written consent of the respective
corporation, except as may be required for the Executive to fulfil the
Executive's employment duties to the Broker. Neither during the term of the
Executive's employment nor at any time thereafter will the Executive make use of
any Confidential Information for the Executive's own benefit or for the benefit
of any other person or persons, firm, partnership, association or corporation
other than The Hub Group, or assist others in so doing; provided that nothing
herein shall prohibit the Executive from using Confidential Information that:
(i) was readily available to the public at the time such information
was available to the Executive;
(ii) become readily available to the public after the time such
information was made available to the Executive other than
through a breach of this Agreement; or
(iii) is subsequently, lawfully and in good faith obtained by the
Executive from an independent third party without a breach of
this Agreement.
The Executive acknowledges and agrees that the disclosure of any
Confidential Information to competitors of the Broker or the other corporations
of The Hub Group or to the general public may be highly detrimental to the
business interests of The Hub Group. The Executive acknowledges and agrees that
the right of The Hub Group to maintain Confidential Information as confidential
constitutes a proprietary right which the respective corporation is entitled to
protect. Unless otherwise agreed to by the respective corporation, all
Confidential Information shall be and shall remain the sole and exclusive
property of the respective corporation. The Executive shall return to the
Broker, forthwith upon the effective date of termination of the Executive's
employment for any reason whatsoever, all Confidential Information acquired in
connection with the Executive's employment by the Broker. The Executive hereby
agrees with the Broker that, in the event of any
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breach by the Executive of the provisions of this SECTION 4.2, the respective
corporation(s) of The Hub Group shall be entitled to equitable relief, including
an injunction and specific performance, in any competent court having
jurisdiction over the Executive, in addition to all other remedies available to
the respective corporation at law or in equity.
4.3 NON-COMPETITION AND NON-SOLICITATION
(a) The Executive covenants and agrees that the Executive will not,
without the prior written consent of the Broker, either during
the term of this Agreement or at any time within a period of TWO
(2) YEARS following the termination of this Agreement in
accordance with its terms, either individually, in partnership,
jointly, or in conjunction with any other person or persons,
firm, partnership, association, company, corporation or any other
entity as principal, agent, employee, shareholder, or in any
other capacity whatsoever carry on or be engaged in, or be
concerned with or be interested in or advise, lend money to,
guarantee the debts or obligations of, or permit the Executive's
name or any part thereof to be used or employed by any person or
persons, firm partnership, association, company, corporation or
any other entity engaged in or concerned with, or interested in
any insurance agency or brokerage business in BRITISH COLUMBIA.
Notwithstanding the foregoing, the provisions of this SECTION
4.3(A) shall not apply in the event that this Agreement is
terminated by the Broker pursuant to SECTION 5.1 or the
employment of the Executive is otherwise terminated by the Broker
without cause.
(b) The Executive agrees that the Executive shall not directly or
indirectly approach or solicit any client of The Hub Group except
for the benefit of The Hub Group or attempt to direct any such
client away from The Hub Group at any time during the term of the
Executive's employment and for the period of
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TWO (2) YEARS after termination of this Agreement in accordance
with its terms.
(c) If the Executive violates any of the provisions of SECTIONS
4.3(B), the Executive shall pay to The Hub a sum equal to THREE
(3) TIMES the annual commissions and fees generated by clients
obtained by the Executive in violation of SECTION 4.3(B). For
each such client, the annual commissions and fees shall be the
greater of the amount generated in the year preceding and the
amount generated in the year following the date upon which the
client becomes a client of the competing business.
(d) The amount payable by the Executive under SECTION 4.3(C) shall be
paid in cash and as soon as it is determinable and may be set-off
by the Broker against any amount owing or to become owing by the
Broker or The Hub to the Executive. The Executive acknowledges
that the said amount is a reasonable calculation of the
respective corporation's liquidated damages given the interest of
the corporation in maintaining its client base and the future
profits which would be foregone by the corporation if the
Executive violates the provisions of SECTION 4.3(B). The
Executive further acknowledges that the payment by the Executive
pursuant to SECTION 4.3(C) shall in no way limit the other
remedies to which the respective corporation of The Hub Group may
be entitled as a result of the Executive's breach of SECTIONS
4.3(A) or (B). Without limiting the generality of the foregoing,
the Executive recognizes that a breach by the Executive of any of
the covenants contained in SECTION 4.3(A) would result in damages
to the respective corporation of The Hub Group and that The Hub
Group may not be adequately compensated for such damages by the
payment of the amounts contemplated in SECTION 4.3(C). The
Executive agrees that in the event of any such breach, and in
addition to any other remedies available to The Hub
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Group at law or otherwise, The Hub shall, on behalf of the
respective corporation of The Hub Group, be entitled as a matter
of right to apply to a court of competent jurisdiction for relief
by way of injunction, restraining order, decree or otherwise as
may be appropriate to ensure compliance by the Executive with the
provisions of SECTIONS 4.3(A) and (B).
4.4 The Executive agrees that all restrictions in this SECTION 4 are
necessary and fundamental to the protection of the business of the Broker and
the other corporations of The Hub Group and are reasonable.
5. TERM AND TERMINATION
5.1 This Agreement and the employment of the Executive hereunder shall be
for an indefinite term, subject to termination by the Broker for any reason
whatsoever without notice, provided that, in the event that the Agreement is
terminated by the Broker in accordance with this SECTION 5.1, the Executive
shall be entitled to continue to receive an amount equal to the Basic
Compensation (save and except the bonus component, if any, related thereto) and
the value of the group insurance and automobile allowance components of the
Benefits for the severance period hereinafter defined. Notwithstanding the
foregoing, in the event that the Executive breaches any of the provisions of
SECTION 4, effective as at the date of such breach the Executive shall not be
entitled to any further payment, provided however, that in no event shall the
Executive receive an amount that is less than the prescribed minimum under
applicable employment standards legislation. For the purposes of this SECTION
5.1, "SEVERANCE PERIOD" means the period commencing as at the effective date of
such termination and ending on the first anniversary of the date thereof.
5.2 Notwithstanding SECTION 5.1, this Agreement may be terminated
immediately by either party, for cause, without further obligation to the other
party (THE "DEFAULTING PARTY"), on notice to the defaulting party in the event
that the defaulting party:
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(a) shall make a general assignment for the benefit of creditors or
shall be adjudicated a bankrupt or insolvent or file a voluntary
petition or answer seeking reorganization or an arrangement with
its creditors or take advantage of a bankruptcy, insolvency,
dissolution or liquidation law or analogous statute; or
(b) is in continuing breach of any of its material covenants or
obligations hereunder and has failed to rectify such breach
within SIXTY (60) DAYS following receipt of notice of such breach
from the other party;
provided that, in the event that the Agreement is terminated by the Broker in
accordance with this SECTION 5.2, the Executive shall be entitled to receive an
amount equal to the Basic Compensation and the value of Benefits to the date of
termination.
5.3 Notwithstanding SECTION 5.1, this Agreement may be terminated by the
Broker on notice to the Executive due to the Disability of the Executive, upon
NINETY (90) DAYS' notice to the Executive.
5.4 Notwithstanding SECTION 5.1, this Agreement shall be terminated
immediately upon the Death of the Executive or, unless otherwise agreed by the
parties, upon the Executive attaining SIXTY-FIVE (65) YEARS of age.
5.5 Upon termination of this Agreement in accordance with SECTION 5.1 or
SECTION 5.2, the Executive shall have no other claim against the Broker for
damages for failure to give reasonable notice or pay in lieu of notice,
severance pay or otherwise, except as set out in the respective Section.
5.6 In the event of termination of this Agreement in accordance with the
terms hereof, the provisions of SECTION 4 shall continue in full force and
effect.
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6. ARBITRATION
Any question, dispute or disagreement (HEREINAFTER REFERRED TO
AS THE "DISPUTE") arising under or pertaining to this Agreement including the
interpretation, application or construction of this Agreement or any part
thereof shall be determined by arbitration in accordance with the following
terms and provisions:
(a) the Dispute shall be submitted to a single arbitrator as may be
agreed upon by the parties hereto, provided that if a single
arbitrator has been requested by one of the parties hereto and
the other party fails to agree on a single arbitrator, then the
Dispute may be referred to a board of THREE (3) arbitrators or
TWO (2) to be named, as to ONE (1) each, by the parties and the
third to be appointed by the first TWO (2) named arbitrators;
(b) if either party shall refuse or neglect to appoint an arbitrator
within TEN (10) business days after the other party shall have
appointed an arbitrator and shall have served a written notice
upon the party so refusing or neglecting to appoint an
arbitrator, then the arbitrator first appointed shall, at the
request of the party appointing the Executive to proceed to
hearing and determine the Dispute as if he or she were a single
arbitrator appointed by both parties for that purpose;
(c) if TWO (2) arbitrators are so named within the time prescribed
and they do not agree within a period of TEN (10) business days
upon the appointment of the third arbitrator, then upon the
application of either party, the third arbitrator shall be
appointed by a Judge of the Supreme Court of British Columbia;
(d) the determination of the Dispute which shall be made by the said
arbitrators of a majority of them, or by a single arbitrator, as
the case may be, shall be
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final and binding upon the parties hereto and the costs of the
arbitration and remuneration of the third arbitrator shall be
borne equally between all parties thereto, each party bearing the
remuneration of the arbitrator appointed by it; and
(e) the provisions of SECTION 6 shall be deemed to be submission to
arbitration within the provisions of the COMMERCIAL ARBITRATION
ACT of British Columbia, as amended from time to time.
7. GENERAL PROVISIONS
7.1 Any and all previous agreements, written or oral, between the parties
hereto or on their behalf relating to the employment of the Executive by the
Broker, are hereto terminated and cancelled and each of the parties hereto
hereby releases and forever discharges the other hereto of and from all manner
of actions, causes of action, claims and demands whatsoever under or in respect
of any such agreement.
7.2 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 the
Broker, respectively.
7.3 This Agreement shall be construed in accordance with the laws of the
Province of British Columbia and the laws of Canada applicable therein.
7.4 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 and this Agreement shall
be read and construed as if such void or unenforceable provision were excluded
from this Agreement.
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7.5 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:
In the case of the Broker, to:
BARTON INSURANCE BROKERS LTD.
45710 AIRPORT ROAD
CHILLIWACK, B.C.
V2P 6Z9
ATTENTION: R. CRAIG BARTON
And in the case of the Executive, to the Executive's last known
address.
Any such notice or other documents delivered personally shall 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 business day following
the date of mailing. Any party may at any time give notice to the other or any
change of address.
7.6 All amounts referred to herein are in Canadian dollars unless
otherwise indicated.
IN WITNESS WHEREOF the parties hereto have hereunto executed this
Agreement as of the day and year first above written.
BARTON INSURANCE BROKERS LTD.
Per: /s/ W. Kirk James
-------------------------------
Authorized Signatory
/s/ R. Craig Barton
-----------------------------------
R. CRAIG BARTON
HUB INTERNATIONAL LIMITED
Per: /s/ W. Kirk James
------------------------------
Authorized Signatory
THIS IS SCHEDULE "A" REFERRED TO IN THE
ANNEXED EMPLOYMENT AGREEMENT MADE BETWEEN
THE BROKER AND THE EXECUTIVE
SERVICES
The Executive shall perform such duties as the Broker, acting reasonably, shall
assign from time to time in connection with the Executive's position as
President and Chief Executive Officer of the Broker, including, without
limitation, the following:
To follow the lawful orders and directions of the Board of
Directors of the Broker provided to the Executive from time to time.
THIS IS SCHEDULE "B" REFERRED TO IN THE
ANNEXED EMPLOYMENT AGREEMENT MADE BETWEEN
THE BROKER AND THE EXECUTIVE
BASIC COMPENSATION
The Executive is entitled to be paid the following salary and/or commission,
subject to review from time to time and adjustment as recommended by the
President of The Hub and approved by the Chair of The Hub having regard to the
performance of the Broker relative to the Broker's Basic Profit and NIBGAIT
targets (as defined in the Management Bonus Agreement between the Broker and The
Hub):
FOUR HUNDRED THOUSAND ($400,000.00) DOLLARS PER ANNUM
BENEFITS
O Group insurance (including medical, dental, death and disability) and
such other benefits as are made available to employees of the Broker,
provided that the Executive qualifies for coverage under such plans.
O A monthly automobile allowance.
VACATION
The Executive shall be entitled to such vacation as the Broker may agree upon.