Exhibit 10.5
EXECUTIVE CONFIDENTIALITY, NON-SOLICITATION
AND INSIDER AGREEMENT
TO: HUB INTERNATIONAL LIMITED AND ITS SUBSIDIARIES (collectively, "Hub
International")
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WHEREAS:
A. the undersigned (the "Executive") and Hub International have entered
into an employment agreement dated as at the date hereof whereby Hub
International employs the Executive (the "Employment Agreement"); and
B. the defined terms "Cause" and "Good Reason" used in this Agreement
have the meanings given to them in the Employment Agreement;
NOW THEREFORE for good and valuable consideration, including the
employment of the Executive by Hub International, the Executive agrees
as follows:
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 Hub
International, whether paid for, serviced or produced by the
respective corporation of Hub International 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 relationship with Hub International for
any reason whatsoever.
2. CONFIDENTIALITY. The Executive acknowledges that in the course of
carrying out the Executive's duties to Hub International, the
Executive will have access to and will be entrusted with confidential
information concerning the business and corporate affairs of the
corporations of Hub International and their clients ("Confidential
Information"), including information pertaining to the respective
corporation's relationships with insurance carriers and lenders,
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, e-commerce strategies, personnel and
training procedures. The term "Confidential Information" shall be
deemed to include all such information that the Executive currently
possesses as a result of the Executive's prior employment, if any, by
any of the corporations of Hub International. The Executive agrees
that all Confidential Information 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 relationship with Hub
International or at any
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time thereafter without the prior written consent of the respective
corporation, except as may be required for the Executive to fulfil the
Executive's duties to Hub International or as may be required by law.
Neither during the term of the Executive's relationship with Hub
International 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 Hub International, or assist
others in so doing; provided that nothing herein shall prohibit the
Executive from using Confidential Information that:
(a) was readily available to the public at the time such information
was available to the Executive;
(b) became readily available to the public after the time such
information was made available to the Executive other than
through a breach of this Agreement;
(c) is lawfully and in good faith obtained by the Executive from an
independent third party without a breach of obligations of
confidentiality or of this Agreement; or
(d) is information and expertise that was known to the Executive
prior to the date of this Agreement or any prior agreement of
employment, services or confidentiality between the Executive and
any of the corporations of Hub International.
The Executive shall have the burden of proof in establishing that any
item of Confidential Information falls within one of the foregoing
exceptions.
The Executive acknowledges and agrees that the disclosure of any
Confidential Information to competitors of Hub International or to the
general public may be highly detrimental to the business interests of
Hub International. The Executive acknowledges and agrees that the
right of Hub International to maintain Confidential Information as
confidential constitutes a proprietary right that 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 Hub International,
forthwith upon the effective date of termination of the Executive's
relationship with Hub International for any reason whatsoever, all
records of Confidential Information in the possession of the Executive
which were acquired in connection with the Executive's employment by
Hub International. The Executive agrees that in the event of any
breach of this Section 2, and in addition to any other remedies
available to Hub International at law or otherwise, Hub International
Limited, either on its own behalf or on behalf of the other respective
corporation(s) of Hub International, shall 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 this Section 2.
3. NON-SOLICITATION
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(a) The Executive agrees that the Executive will not, without the
prior written consent of Hub International Limited, either during
the term of the Executive's employment with Hub International or
at any time within a period of two (2) years following the
cessation thereof for any reason whatsoever (the "Restricted
Period"), 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, directly or indirectly, approach or solicit any
client, employee or producer of Hub International except for the
benefit of Hub International or attempt to direct any such
client, Executive or producer away from Hub International.
Without limiting the generality of the foregoing, the Executive
shall not directly or indirectly approach or solicit any of the
clients comprising the book of insurance business serviced by Hub
International while the Executive is employed by Hub
International for the purpose of selling insurance or consulting
as to the purchase or sale of insurance during the Restricted
Period, other than on behalf of Hub International.
(b) The Executive shall pay to Hub International a sum equal to two
(2) times the annual commissions and fees generated by clients
obtained by the Executive in violation of Section 3(a). 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.
(c) The amount payable by the Executive under Section 3(b) shall be
paid in cash and as soon as it is determinable and may be set off
by Hub International against any amount owing or to become owing
by any corporation of Hub International 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 respective 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 3(a). The Executive further acknowledges that the payment
by the Executive pursuant to Section 3(b) shall in no way limit
the other remedies to which the respective corporation of Hub
International may be entitled as a result of the Executive's
breach of Section 3(a). Without limiting the generality of the
foregoing, the Executive recognizes that a breach by the
Executive of any of the covenants contained in Section 3(a) would
result in damages to the respective corporation of Hub
International on an ongoing basis and that Hub International may
not be adequately compensated for such damages by the payment of
the amounts contemplated in Section 3(b). The Executive agrees
that in the event of any such breach, and in addition to any
other remedies available to Hub International at law or
otherwise, Hub International Limited, either on its own behalf or
on behalf of the respective corporation(s) of Hub International,
shall 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 Section
3(a).
4. NON-COMPETITION. The Executive covenants and agrees that the Executive
will not, without the prior written consent of Hub International,
during the Restricted Period, either individually, in partnership,
jointly, or in conjunction with any other person or persons, firm,
partnership, association, company, corporation or any other entity as
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principal, agent, employee, shareholder, or in any other capacity
whatsoever carry on or be engaged in any aspect of the insurance
agency business in the United States or Canada, 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 other person or
persons, firm, partnership, association, company, corporation or any
other entity engaged in any aspect of the insurance agency business in
the United States or Canada. Notwithstanding the foregoing, the
provisions of this Section 4 shall not:
(a) apply in the event that this Agreement is terminated by Hub
International without Cause or by the Executive for Good Reason,
including in accordance with Section 5(2) of the Employment
Agreement; or
(b) prohibit the Executive from directly or indirectly owning up to
10% of the issued capital stock of any public company the price
of whose shares is quoted in a published newspaper of general
circulation.
5. DISCLOSURE OF MATERIAL INFORMATION. The Executive acknowledges that
common shares of Hub International Limited are traded on the Toronto
Stock Exchange and that, subject to certain exceptions, as a publicly
traded company Hub International Limited has an obligation not to
disseminate material information related to the company unless
disclosure of such information is made contemporaneously to the
public. The Executive therefore agrees not to make any public
disclosure of material information related to Hub International
without the prior written consent of Hub International Limited. The
Executive further acknowledges that unauthorized disclosure by the
Executive of internal information relating to Hub International could
result in liability under xxxxxxx xxxxxxx legislation for Hub
International Limited and/or the Executive. Notwithstanding the
foregoing, the Executive undertakes and agrees to disclose unpublished
material information related to Hub International to the Executive's
immediate supervisor, Hub International Limited's General Counsel or
such other person of authority employed by Hub International Limited
as may be appropriate under the circumstances, if the Executive has
reason to believe that such information is not then known to the
appropriate person(s) of authority employed by Hub International
Limited who would, in the normal course, determine whether Hub
International Limited must disclose such information to the public.
6. XXXXXXX XXXXXXX. The Executive acknowledges that if the Executive is
in possession of any material information that relates to Hub
International that has not yet been made public, the Executive must
refrain from trading in Hub International Limited's shares (buying or
selling) until the material information has been made public and the
Executive agrees to advise others to whom the Executive divulges
unpublished material information that they have the same
responsibility.
7. CODE OF ETHICS. The Executive acknowledges that the Executive has
received, read and understands Hub International Limited's "Xxxxxxx
Xxxxxxx Code of Ethics and Disclosure Requirements" and agrees to
comply therewith.
8. GROUNDS FOR DISMISSAL. The Executive acknowledges and agrees that due
to the significance of the matters addressed herein and the negative
consequences that may follow a contravention of any of the terms
hereof, a breach by the Executive of any of the Executive's
obligations hereunder may result in the Executive's immediate
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dismissal and that such breach shall be deemed to be included in the
definition of "Cause".
9. RESTRICTIONS NECESSARY. The Executive agrees that all restrictions in
this Agreement are necessary and fundamental to the protection of the
business of the corporations of Hub International and are reasonable.
10. ENFORCEABILITY. 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. 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
this 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 this Agreement in any
other jurisdiction.
11. GOVERNING LAW. This Agreement shall be interpreted in accordance with
the laws of the State of Illinois.
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DATED this 19th day of March, 2001.
/s/ W. Xxxx Xxxxx /s/ Xxxxxx X. Xxxxxx
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WITNESS SIGNATURE EXECUTIVE SIGNATURE
X. Xxxx Xxxxx Xxxxxx X. Xxxxxx
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