HILB ROGAL & HOBBS COMPANY
Employment Agreement With
F. MICHAEL CROWLEY
THIS AGREEMENT, effective the 15th day of October, 2005, by and between F. Michael Crowley, an individual residing in the County of Henrico, Virginia (the “Executive”), and HILB ROGAL & HOBBS COMPANY, a Virginia corporation with corporate offices located at 4951 Lake Brook Drive, Suite 500, Glen Allen, Virginia 23060 (the “Company”).
WHEREAS, the Company has promoted the Executive to the position of President 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 President 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 the two (2) year period commencing on October 15, 2005, and ending on October 31, 2007; provided, however, that commencing on October 31, 2006 and on each annual anniversary of such date (such date and each annual anniversary being hereinafter referred to as the “Renewal Date”) unless previously terminated, the term of employment shall automatically extend so as to terminate two (2) years from such Renewal Date, unless notice that the term of employment will not be extended is given by either party to the other at least 60 days prior to the Renewal Date.
(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:
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)) or pursuant to Paragraph (3) above for other than “Good Reason” (defined in Section VI.(A)), Section V.(B) shall apply;
II. Services To Be Rendered .
The Company agrees to employ the Executive as the President 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 agrees that his employment as President 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 $440,000, payable in twenty four semi-monthly installments. This annual base salary shall be reviewed annually by the Human Resources & Compensation Committee of the Board of Directors 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 may also be entitled to an annual incentive bonus as established and modified, from time to time, by the Human Resources & Compensation Committee of the Board of Directors. For purposes of this Agreement, in calculating any amount which may be due as a result of a Change of Control or termination without proper cause, the Executive shall be deemed to have received a bonus of $288,000 on October 15, 2005.
(C) Ancillary Benefits .
The Executive shall also be entitled to vacations, participation in the Company’s Retirement Savings Plan, Executive Voluntary Deferral Plan 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 coverage, 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) Stock Based Awards.
The Executive shall receive such stock option awards each year as determined by the Human Resources & Compensation Committee of the Board of Directors in its sole discretion.
IV. Disability .
(A) The term of employment of the Executive may be terminated at the election of the Company upon the Board of Director’s receiving evidence that the Executive is disabled as that term is defined in the Group Long Term Disability Insurance Certificate and Summary Plan Description for the Company’s Group Disability Plan.
(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 or Without Good Reason
(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) gross misconduct, including without limitation: (a) the perpetration of a fraud by Employee upon HRH or any of HRH’s customers; (b) the embezzlement or theft of money or property by the Executive from HRH or any of HRH’s customers; or (c) Employee’s arrest or conviction for a crime involving a felony.
(4) a breach of HRH’s Code of Business Conduct and Ethics. A few examples of conduct that may result in Termination for Cause for a breach of HRH’s Business Code of Ethics include: (a) a violation of the law or Company policy, including requesting or directing others to violate the law or Company policy; (b) the failure to report a known or suspected violation of Company policy; (c) the failure to cooperate in an investigation of possible violations of Company policy; (d) the retaliation against another HRH employee for reporting a concern or violation; (e) the intentional false reporting of another officer or employee; (f) the failure to monitor and oversee compliance with Company policies and applicable law by subordinates effectively; and (g) the unauthorized disclosure of confidential information relating to HRH or HRH employees, vendors or customers;
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 by the Company pursuant to Section I.(B)(2) for Proper Cause or by the Executive pursuant to Section I.(B)(3) other than for “Good Reason” (defined in Section VI.(A)), 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 for Good Reason or Without Proper Cause .
(A) The occurrence of any of the following events shall constitute “Good Reason” for termination of employment by Executive:
(1) the assignment to the Executive of any duties inconsistent in any respect with the Executive’s position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section II. of this Agreement, or any other action by the Company which results in a diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive; or
(2) any failure by the Company to comply with any of the provisions of Section III. of this Agreement, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive; or
(3) the Company’s requiring the Executive to be principally based at any office or location other than within the Richmond, Virginia metropolitan area.
(B) In the event of termination of the Executive by the Company pursuant to Section I.(B)(2) without Proper Cause or by the Executive pursuant to Section I.(B)(3) for Good Reason, the Company shall thereafter be and remain obligated to the Executive (or his estate or designated beneficiary) for the following:
(1) continuation of 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 term of employment established by Section I.(A) or for one (1) year, whichever is greater;
(2) immediate full vesting of all unvested stock options and awards of restricted stock; and
(3) immediate full vesting of all benefits in the Company’s Supplemental Executive Retirement Plan.
(C) In the event of a dispute as to whether Executive was terminated for or without “Proper Cause,” or for or without “Good Reason,” 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 this Section VI. until the dispute is resolved by an arbitrator pursua