**MANAGEMENT BONUS MODIFICATION AGREEMENT**
     DATED with effect December 31, 2003.
     **RECITALS**
**A.**     The capitalized terms used in this Agreement have the meanings they aregiven under Section 1 unless otherwise specified in this Agreement, or, if notreferred to under Section 1 or elsewhere in this Agreement, then in the currentPlan (the definitions of the capitalized terms in the current Plan are attachedas Schedule A).
**B.**     This Agreement sets out the terms that the undersigned have agreed upon inconnection with the termination of the Management Bonus Agreements.
     **AGREEMENT**
     For good and valuable consideration, the receipt of which is acknowledged,each of the undersigned agrees as follows, both in the undersigned’s personalcapacity and in the undersigned’s capacity as an authorized officer, and onbehalf, of the corporation designated in connection with the undersigned’ssignature below.
     **DEFINITIONS**
1.     The following terms have the meanings set out below:
 (a) “this Agreement” means this agreement and any amendments oraddendums thereto;  (b) “Bonus” means any bonus (including, without limitation, a“Year-End Profitability Bonus”, and, where applicable, a “Mid-YearProfitability Bonus” or “Growth Bonus”) that would be payable to anOperating Subsidiary or an Eligible Manager pursuant to anyManagement Bonus Agreement or any other or new arrangement wherebybonuses are payable to senior employees of the OperatingSubsidiaries, including under the Modified Management Bonus Formula;  (c) “Bonus Committee” means the standing sub-committee of theexisting Executive Committee called the “Bonus Committee”, that iscurrently comprised of Hub’s Chief Executive Officer, ChiefOperating Officer, President, U.S. Operations and President,Canadian Operations, or such other similar committee approved by theCompensation Committee for the purpose of recommending or approvingthe payment of Bonuses;  (d) “Compensation Committee” means the Compensation Committee ofHub’s Board of Directors;  (e) “EBITA” for an Operating Subsidiary means earnings beforeinterest, taxes and amortization, previously known as “NIBGAIT” (netincome before goodwill amortization, interest and taxes), adjustedto remove any Extraordinary Items and to take into account anyacquisition of the shares or assets of a brokerage
 

 

   acquired during the applicable year to allow for the fact thatsuch shares or assets were owned by the Operating Subsidiary foronly part of such fiscal year;  (f) “Eligible Managers” means the individuals who are employed bythe Operating Subsidiaries and who are eligible to participate inand receive a Bonus under a Management Bonus Agreement in connectionwith such employment, collectively; and “Eligible Manager” means oneof the Eligible Managers;  (g) “Extraordinary Items” means items that are outside of thenormal course of business (such as income or revenue that isunrelated to brokerage operations), as determined by the BonusCommittee acting reasonably under all of the circumstances;  (h) “Hub” means Hub International Limited;  (i) “Management Bonus Agreements” means the existing writtenManagement Bonus Agreements between Hub and the OperatingSubsidiaries (and, in some cases, certain of the Eligible Managers),as amended or modified, collectively, including, without limitation,that certain Memorandum of Understanding re Hub International BonusStructure dated May 28, 2002; and “Management Bonus Agreement” meansthe Management Bonus Agreement that applies to a certain OperatingSubsidiary;  (j) “Modified Management Bonus Formula” means the formula bywhich the Bonus for the Operating Subsidiaries will be calculatedeffective January 1, 2003 in accordance with Section 4(b);  (k) “Operating Subsidiaries” means Hub’s Subsidiaries that aresignatories to this Agreement, collectively; and “OperatingSubsidiary” means one of the Operating Subsidiaries;  (l) “Plan” means Hub’s Equity Incentive Plan, as amended fromtime to time (the “Plan”);  (m) “Revenue” for an Operating Subsidiary means for any fiscalyear the revenue of the Operating Subsidiary from brokerageoperations (net of brokerage commissions paid or payable to thirdparties), calculated in accordance with generally acceptedaccounting principles applied consistently with past practices,adjusted to remove any Extraordinary Items and to take into accountany acquisition of the shares or assets of a brokerage during theapplicable year to allow for the fact that such shares or assetswere owned by the Operating Subsidiary for only part of such fiscalyear;  (n) “RSU” means a Restricted Share Unit as provided for in thePlan and awarded as contemplated in this Agreement pursuant to anRSU Agreement; and “RSUs” means the RSUs, collectively;  (o) “RSU Award Agreement” means a Restricted Share Unit AwardAgreement in the form attached as Schedule 1(m);
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 (p) “Schedule” means a Schedule to this Agreement;  (q) “Section” means a section or subsection of this Agreement;and  (r) “Subsidiaries” means Hub’s “subsidiary companies”, as suchdefined in the *Securities Act*, Ontario, and includes MartinAssurance & Gestion de Risques Inc.
**TERMINATION AND RELEASE OF MANAGEMENT BONUS AGREEMENTS**
2.     Each of the Management Bonus Agreements is terminated with retroactiveeffect to January 1, 2003. Each of the Eligible Managers, the OperatingSubsidiaries and Hub (each, a “Releasing Party”) agrees that by executing thisAgreement, and in consideration of the covenants in this Agreement, theReleasing Party does hereby, for the Releasing Party’s self and for theReleasing Party’s heirs, executors, administrators, representatives, successorsand assigns, as applicable, release and forever discharge the other ReleasingParties and their affiliates and each of their officers, directors, attorneys,employees, agents, successors, assigns and representatives, and all personsacting for, by, through, under or in concert with any of them (collectively“Released Parties”), of and from any and all debts, obligations, promises,covenants, agreements, contracts, endorsements, bonds, controversies, suits,actions, causes of action, judgments, damages, expenses, claims or demands,whether in law or in equity, (collectively, “Claims”) that are in any wayrelated to the relevant Management Bonus Agreement or the termination thereof,including any Claim to a Bonus thereunder, whether known or unknown, presentlyor in the future asserted, and, in the case of the Eligible Managers, whetheror not derived through a relationship of employment or for other services.However, the Releasing Party is not releasing or waiving any rights to enforce,or claims that may arise under, this Agreement.
     **AWARD OF RSUs**
3a.     In consideration of the release contained in Section 2, Hub agrees to awardRSUs equal to the Brokerage RSU Number, as defined in clause B of Schedule 3,to employees of the respective Operating Subsidiary (each, an “Awardee”) ashereinafter set out in this Section 3.
3b.     On February 27, 2004, Hub will deliver to each Awardee an RSU AwardAgreement awarding to the Awardee that number of RSUs indicated in clause C ofSchedule 3.
3c.     The balance of the Brokerage RSU Amount, as defined in clause A of Schedule3, if any, after the RSU awards described in Section 3b, may be allocated bythe respective Operating Subsidiary for award to any of its employees at anytime on or before December 31, 2010, subject to approval by the CompensationCommittee upon the recommendation of the Bonus Committee.
3d.     RSUs that are forfeited by Awardees prior to the applicable Vesting Date orAlternate Vesting Date (as such terms are defined in the RSU Award Agreement)may be reallocated by the Bonus Committee to any of the employees of Hub or itsSubsidiaries, after consultation with the Operating Subsidiary that employed theforfeiting Awardee, at any time on or before December 31, 2010, subject toapproval by the Compensation Committee.
3e.     Hub will award such RSUs as are approved by the Compensation Committee inaccordance with the foregoing.
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3f.     RSUs awarded pursuant to Section 3c and 3d will have substantially the sameterms as the RSUs awarded pursuant to the RSU Award Agreements, except that:(1) the value attributedto such RSUs will be the *greater of*the closing trading price of one Hub commonshare on the New York Stock Exchange (NYSE) or the Toronto Stock Exchange (TSX)(whichever is greater) on the date(s) such RSUs are awarded *and*US$14.00; (2)the Vesting Date will be extended to reflect the time elapsed from the date ofthe awards made pursuant to Section 3b, unless otherwise approved by theCompensation Committee; and (3) the Compensation Committee will have the rightto establish such further and other terms in connection with RSUs as theCompensation Committee, acting reasonably, deems appropriate.
3g.     Any award of RSUs will be subject to applicable securities laws and theapproval of the Toronto Stock Exchange (TSX) and the New York Stock Exchange(NYSE), if and as required. In this regard, Hub represents that the appropriateapprovals have been obtained for the award of the RSUs contemplated by Section3b.
     **MODIFIED MANAGEMENT BONUS FORMULA**
4.     The following Bonus arrangements will be applicable in connection with 2003and subsequent years:
 (a) Bonuses will *not*be a contractual entitlement of Hub’semployees or an obligation of Hub. The Bonus Committee may, afterconsultation with management of an Operating Subsidiary, establishnew performance targets or criteria, or new Bonus formulae, inadvance of any given fiscal year for any respective OperatingSubsidiary based on a reasonable assessment of all the circumstancesat the time, including those related both to the OperatingSubsidiary and Hub.  (b) Subject to the approval of Compensation Committee *after*thecompletion of the respective fiscal year as contemplated in Section4(c), the Bonus Committee and the Compensation Committee haveapproved that effective January 1, 2003 the aggregate Bonus payableto each of the Operating Subsidiaries will be calculated accordingto the following formula (the “Modified Management Bonus Formula”):
 (i) if an Operating Subsidiaryachieves EBITA that exceeds a specified threshold ofthe Operating Subsidiary’s Revenue from all sourcesfor the relevant year (the “Modified Waterline”), theOperating Subsidiary will receive an aggregate cashBonus equal to a percentage of the OperatingSubsidiary’s *total*EBITA for the year, calculatedfrom the first dollar of EBITA earned by the OperatingSubsidiary in such year, as set out in Schedule4(b)(i);  (ii) the Modified Waterline will bethe greater of: (1) 20% of the Revenue of theOperating Subsidiary for the relevant year, *after*headoffice expense (at least 4% of Hub’s revenue,allocated ratably amongst the Operating Subsidiariesbased on their Revenue for the applicable year); (2)an amount equal to the actual average EBITA for 2002and 2003 which was used to calculate the Brokerage RSUAmount (as defined in Schedule 3A); and (3) an amountequal to the respective Operating 
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   Subsidiary’s EBITA(plus the EBITA of any subsidiary thereof)purchased by Hub when it was acquired by Hub (as setout in Schedule 4(b)(ii)(3)); and  (iii) except as approved by the BonusCommittee, the Bonus for each Operating Subsidiarywill not exceed 4% of the respective OperatingSubsidiary’s Revenue for the applicable year.
 (c) The Bonus Committee will review and consider for approval therecommendations of each Operating Subsidiary as to the identity andterms of participation of the individuals within the OperatingSubsidiary in any Bonus, both before (in connection with the budgetprocess) and after the conclusion of each fiscal year. TheCompensation Committee of Hub’s Board of Directors must approve allBonuses for senior management of the Operating Subsidiaries if andas required by the Charter for the Compensation Committee.
     **MISCELLANEOUS**
5.     Signature by Counterpart and by Facsimile. This Agreement may be signed incounterparts and by facsimile, and each such counterpart will constitute anoriginal document and such counterparts, taken together, will constitute oneand the same memorandum.
6.     Headings. The inclusion of headings in this Agreement is for convenience ofreference only and will not affect the construction or interpretation hereof.
7.     Invalidity of Provisions. Each of the provisions contained in this Agreementis distinct and severable and a declaration of invalidity or unenforceabilityof any such provision by a court of competent jurisdiction will not affect thevalidity or enforceability of any other provision hereof.
8.     Enforceability. This Memorandum will be governed by and construed inaccordance with the laws of the Province of Ontario and the laws of Canadaapplicable therein.
9.     Precedence. This Agreement supercedes all prior agreements relating to thematters addressed herein. To the extent there is any conflict between anyprovision of this Agreement and the provisions of any other agreement,including the Management Bonus Agreement, this Agreement shall govern.
10.     Modifications. Modifications or amplifications, if any, to the terms ofthis Agreement in respect of any particular Operating Subsidiary or employee ofthe Operating Subsidiary will be made by way of addendum to the signatory pageof this Agreement for the respective Operating Subsidiary or employee of theOperating Subsidiary.
     IN WITNESS WHEREOF the parties have executed this Agreement.
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**SIGNATORY PAGES TO FOLLOW**
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**SIGNATURE PAGE TO MANAGEMENT BONUS MODIFICATION AGREEMENT**