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EMPLOYMENT AGREEMENT
This Employee Agreement, made as of November 17, 1999, by and between
SUPERIOR NATIONAL INSURANCE GROUP, INC. ("Superior National"), a Delaware
corporation, and ROBERT E. NAGLE ("Employee"), an individual, residing at 49
Peregrine Circle, Oak Park, California 91377.
W I T N E S S E T H:
WHEREAS, Superior National and Employee wish to establish the terms and
conditions that shall apply to Employee's employment with Superior National;
NOW THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, the parties hereto agree as follows:
1. EMPLOYMENT. Superior National hereby employs Employee, and Employee
hereby accepts this employment as SENIOR VICE-PRESIDENT, GENERAL COUNSEL &
SECRETARY of Superior National (reference herein to Superior National shall also
mean each of the subsidiary companies of Superior National) and in conformance
with the terms and conditions set forth herein agrees to exercise and perform
faithfully and to the best of Employee's ability and experience on behalf of
Superior National the powers and duties customarily exercised and performed by a
SENIOR VICE-PRESIDENT, GENERAL COUNSEL & SECRETARY of an insurance group.
Employee shall devote Employee's full time efforts to the business affairs of
Superior National. The terms of the Employment Term Sheet attached hereto as
Addendum A are made a part hereof.
2. LOCATION. Employee's services pursuant to this Agreement shall be
performed at Superior National's offices in Los Angeles County, California and
such other locations as Superior National's offices may be located. Employee
shall not be required to relocate outside of Southern California in order to
perform the services hereunder, without the Employee's consent, except for
travel reasonably required in the performance of Employee's duties hereunder.
3. TERM OF EMPLOYMENT. Subject to section 7 hereof, Employer hereby
employs Employee, and Employee agrees to be so employed for an initial term of
two (2) years, commencing on NOVEMBER 17, 1999, and renewing automatically for a
term of twelve (12) months unless notice of non-renewal is given by Employer at
least sixty (60) days prior to the end of the then-current term of this
Agreement.
4. COMPENSATION AND OTHER BENEFITS. As compensation in full for
services to be rendered by Employee hereunder, Superior National shall pay and
Employee shall accept the following:
4.1 SALARY. From the date of this Agreement until termination
of employment, Superior National shall pay Employee a salary determined by the
Board of Directors of Superior National, payable in accordance with Superior
National's payroll policies. Employee's starting salary shall be set forth in
Addendum "A".
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4.2 BENEFITS. In conformance with Superior National's standard
employment practices for senior executives, Employee shall be entitled to such
vacation, medical, life insurance, accident, disability and dental benefits and
auto allowance, as shall be authorized from time to time by Superior National's
Board of Directors.
4.3 BONUSES. During the term of this Agreement Employee shall
be entitled to such discretionary bonuses or incentive compensation as may be
authorized from time to time by Superior National's Board of Directors.
5. EXPENSES. In addition to the salary and benefits provided hereunder,
Superior National shall pay for or reimburse Employee for those expenses
reasonably incurred in the course of Employee's activities for Superior
National, including transportation, living and related expenses incurred by
Employee during travel on behalf of Superior National away from Superior
National's principal office and for other business and entertainment expenses
reasonably incurred by Employee in connection with the business of Superior
National
6. TERMINATION BY EMPLOYEE.
6.1 VOLUNTARY TERMINATION. In the event Employee voluntarily
resigns or quits employment with Superior National, then, without limitation of
Superior National's other legal or equitable remedies, Superior National shall
have no further obligation hereunder and no further payments of any kind shall
be payable by Superior National to Employee under this Agreement; provided,
however, Employee shall be entitled to receive payments, if any, under any
existing vacation pay, retirement and other benefit plans and policies then
maintained by Superior National and under which Employee may, at such time and
under the separate terms of such plans and policies, be eligible to receive
payment or other benefits.
7. TERMINATION BY SUPERIOR NATIONAL.
7.1 TERMINATION FOR CAUSE. In the event Superior National
terminates Employee's employment for cause ("For Cause"), it shall have no
further obligation to compensate Employee other than to pay for services
rendered through the date of such termination For Cause. For the purposes of
this Agreement, termination For Cause shall be limited to the following:
(a) Employee is convicted of, or pleads guilty or
nolo centendere to, any felony or any crime involving fraud, dishonesty or moral
turpitude:
(b) Employee unlawfully misappropriates funds or
other assets of Superior National or its subsidiaries;
(c) Employee fails or refuses to comply with a
reasonable directive of Superior National's Board of Directors that is
consistent with the terms of this Agreement and with California law (as
applicable), or Employee materially neglects
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Employee's duties, is grossly negligent in the performance of those duties, or
engages in gross misconduct materially injurious to Superior National or
Employee breaches this Agreement;
(d) Employee engages or participates, directly or
indirectly, without the prior written consent of Superior National's Board of
Directors, in any business that is in competition in any manner with the
businesses of Superior National whether as an employee, agent, employer,
principal, partner, shareholder (except as a shareholder of any outstanding
class of securities of a corporation that has a class of securities traded on a
national securities exchange or in the over-the-counter market), officer,
director or any other individual or representative capacity whatsoever;
(e) A material conflict of interest between Superior
National and Employee, as defined by the Superior National Conflict of Interest
Policy.
For the purpose of effectuating a termination For Cause under
subsection 7.1(e), Superior National shall give Employee thirty (30) days prior
written notice setting forth the alleged basis of the Cause and the fact that
Employee shall have forty-five (45) days from the date of such notice to cure
such Cause. If Employee fails to cure such Cause within forty-five (45) days of
the date of such notice, Employee's employment shall be automatically terminated
on the 46th day following the date of such notice.
7.2 TERMINATION OTHER THAN FOR CAUSE.
(a) Any termination of Employee's employment under
this Agreement by Superior National other than For Cause (as defined in
Paragraph 7.1) or significant diminution of Employee's job duties and
responsibilities shall be deemed to be a termination without cause ("Without
Cause"). Superior National may terminate Employee's employment under this
Agreement Without Cause at any time. In the event that Superior National
terminates Employee's employment Without Cause, then from the effective date of
this termination and continuing for the then remaining full term of this
Agreement provided for in section 3, Superior National will pay Employee a
termination benefit equal to One Hundred Percent (100%) of Employee's fixed
monthly salary and all other medical benefits and allowances to which Employee
was entitled in the month in which such termination occurred (the termination
benefit). This termination benefit shall be a minimum of two (2) year's salary
and all other medical benefits and allowances to which Employee was entitled.
(b) During the period of payment of monthly
termination benefits Employee shall be entitled to also receive, under the same
terms and conditions, those medical, dental, disability, life and other existing
benefits in effect at the time of termination. Employee shall be responsible for
"employee premium contributions" for such medical and dental coverages on the
same basis that Superior National's full-time senior executives are assessed for
individual and/or dependent coverages, and such contributions will be deducted
from sums due Employee hereunder.
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(c) Any termination of Employee or significant
diminution of Employee's duties and responsibilities in connection with any
reorganization, merger, conservatorship or consolidation of Superior National, a
result of which Superior National does not survive or in which the outstanding
voting stock of Superior National prior to such event represents less than Fifty
Percent (50%) of the outstanding voting stock of the surviving entity
(collectively, "Change of Control:), shall be deemed a termination Without
Cause. In the event of a termination occurring as a result of a Change of
Control, this Agreement shall be deemed to have a three-year term and Superior
National or the surviving entity will pay Employee the full three (3) year fixed
monthly salary and benefits package in accordance with Subparagraph 7.2(a)
above.
7.3 During any period (prior to a termination) for which
Employee is unable to carry on the full-time duties and services required of
Employee due to physical or mental illness or injury, salary and benefits, as of
the beginning of the period of incapacity, shall be payable in accordance with
Superior National's policies.
8. NON-HIRING OF SUPERIOR NATIONAL PERSONNEL. As long as Superior
National is making payments to Employee under the terms of this Agreement and
for a period twelve months subsequent to the termination of any such payments,
Employee will not hire or cause any person employed by Superior National as of
Employee's termination date or during the six-month period prior to such
termination date to be hired by another employer competing in any manner with
the businesses of Superior National. Recognizing the irreparable nature of the
injury that could be caused by Employee's violation of any provision of this
Paragraph 8, Employee agrees that in addition to and without limitation of any
rights which Superior National may have hereunder, any such violation shall be
the proper subject matter for immediate injunctive relief and entitle Superior
National to terminate this Agreement whereupon no further amounts shall be
payable by Superior National to Employee under this Agreement.
9. CONFIDENTIAL INFORMATION. Employee shall not, except as may be
required by law, use any Confidential Information for any purpose other than on
behalf of Superior National and to not use any Confidential Information for any
purpose adverse to Superior National. For purposes of this Agreement, the term
Confidential Information shall refer to certain confidential information
developed by Superior National as a necessary function of the conduct of its
businesses including, but not limited to, the identity, lists and/or
descriptions of producers or policyholders, financial data, projections, plans
and reports developed for management purposes and not otherwise disseminated,
internal policies and procedures, management systems and procedures, employee
records and information, and other information that may be developed from time
to time by Superior National and be designated as confidential. Such
Confidential Information is unique and has been developed and effectively
applied by Superior National in the conduct of its businesses and constitutes a
valuable and essential asset of the businesses of Superior National. Employee
agrees to protect the confidentiality of and to take all appropriate steps to
prevent unauthorized disclosure or use of the Confidential Information, and
otherwise prevent the Confidential Information from entering the public domain
or the possession by unauthorized persons, with the same
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degree of reasonable and appropriate care as Employee uses with respect to
Employee's own confidential information.
9.1 All documents or media containing the Confidential
Information are, and at all times shall remain, the sole property of Superior
National.
9.2 Without diminishing or waiving any rights of Superior
National otherwise available under law, the term of Employee's covenants of
non-disclosure set forth in this section 9 shall be continuing and shall survive
the termination of this Agreement. Employee's covenants not to use or disclose
the Confidential Information shall terminate as to any information that is or
becomes public knowledge through no fault of Employee and may be utilized by the
public without obligation to Superior National. Termination of Employee's
obligations pursuant to the previous sentence shall have no effect on Superior
National's rights to enforce the non-disclosure obligations with respect to
conduct occurring before the information became public knowledge.
10. REMEDIES OF SUPERIOR NATIONAL. Employee recognizes and agrees that
the duties and services to be rendered by Employee hereunder are of a special,
unique and intellectual character and that Employee's failure to perform those
duties and services will cause irreparable and immeasurable harm to Superior
National. Employee also recognizes and agrees that the restrictions on
Employee's activities contained in this Agreement are required for the
reasonable protection of Superior National's business. Superior National will be
entitled, if it so elects, to institute and prosecute proceedings at law or in
equity or obtain damages with respect to such breach or to enforce the specific
performance of this Agreement by Employee or to enjoin Employee from engaging in
any activity in violation hereof.
11. NON-COMPETITION. During such employment and for a period of two (2)
years thereafter, Employee shall not at any time, directly or indirectly, use or
disclose to any persons, except Superior National and its duly authorized
officers and employees entitled thereto, Employee's customer, brokers and agents
lists, credit classifications, records, statistics or other information acquired
by Employee in the course of his employment in any capacity whatsoever, nor in
any manner, directly or indirectly, aid or be party to any acts the effect of
which would tend to divert, diminish or prejudice the good will or business of
Superior National.
12. NOTICES. All notices which Superior National is required or
permitted to give to Employee shall be given by first class mail addressed to
Employee at Employee's residence indicated above or such other place as Employee
may, from, time to time, designate in writing to Superior National. All notices
which Employee is required to give to Superior National hereunder will be given
in duplicate by registered mail, one copy addressed to Superior National's Board
of Directors and the other to Superior National's Corporate Secretary, at
Superior National's principal place of business.
13. ENTIRE AGREEMENT; AMENDMENT. This Agreement supersedes and
terminates any and all prior understandings, agreements or contracts, whether
oral or in writing, if any, entered into between Employee and Superior National
as of the effective
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date of this Agreement with respect to all matters covered hereunder. This
Agreement constitutes the entire agreement between the parties pertaining to the
subject matters hereof. No representative of Superior National is authorized to
make to any person any representation, warranty or promise with respect to the
subject matters hereof not contained or referred to herein. No change,
termination, waiver or other modification of any provision hereof shall be
binding on Superior National or Employee unless in writing and entered into
between Employee and the Board of Directors of Superior National.
14. CALIFORNIA LAW; SEVERABILITY. This Agreement shall be governed and
construed in accordance with the laws of the State of California. In the event
any provision of this Agreement or the application of any provision to any
signatory hereto shall be held by a court of competent jurisdiction to the
contrary to any applicable California or Federal law, the remaining provisions
of this Agreement shall remain in full force and effect. In the event of a
declaratory, injunctive or enforcement action or in the event of any other
litigation between Employee or Superior National arising under or with respect
to this Agreement and not found subject to the terms of section 16 following
shall be conducted in a State or Federal court sitting in Los Angeles County,
California.
15. COOPERATION. Each of the parties hereto, without further
consideration, agrees to execute and deliver such other documents and to take
such other actions as may be necessary or appropriate to consummate fully the
transactions that are the subject matter of this Agreement.
16. ARBITRATION.
16.1 In the event of any dispute, claim, question or
disagreement arising out of or relating to this Agreement or the breach thereof,
the parties hereto shall use their best efforts to settle such disputes, claims,
questions or disagreement. To this effect, they shall consult and negotiate with
each other, in good faith and, recognizing their mutual interests, attempt to
reach a just and equitable solution satisfactory to both parties.
16.2 If a dispute arises out of or relates to this Agreement,
or the breach thereof, and if said dispute cannot be settled through direct
discussions, the parties agree to first endeavor to settle the dispute in an
amicable manner by mediation administered by a mediator mutually agreeable to
all parties, before resorting to arbitration. Thereafter, any unresolved
controversy or claim arising out of or relating to this Agreement, or breach
thereof, except for the rights of the parties to apply to a court of competent
jurisdiction for a Temporary Restraining Order to preserve the status quo or
prevent irreparable harm pending the selection and confirmation of any
arbitrator, shall be settled by arbitration administered by and in accordance
with the provisions of California Code of Civil Procedure Sections 1280 et seq.,
and judgment upon the award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof.
16.3 The arbitration shall be held in Los Angeles, California
or at such other place as may be selected by mutual agreement.
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16.4 Within fifteen days after the demand for commencement of
arbitration, each party shall select one person to act as arbitrator, and the
two selected shall select a third arbitrator within ten days of their
appointment who will act as sole arbitrator of the dispute. If the arbitrators
selected by the parties are unable or fail to agree upon the third arbitrator,
the third arbitrator shall be appointed by a Superior Court Judge pursuant to
California Code of Civil Procedure Section 1281.6 on petition of a party to the
arbitration agreement.
16.5 The arbitrator will be selected from a panel of persons
having experience with and knowledge of workers' compensation insurance and the
workers' compensation insurance industry.
16.6 The arbitrator shall have the authority to award any
remedy or relief that a court of this state could order or grant, including,
without limitation, specific performance of any obligation created under the
Agreement, the awarding of punitive damages, the issuance of an injunction, or
the imposition of sanctions for abuse or frustration of the arbitration process.
16.7 The arbitrator shall award to the prevailing party, if
any, as determined by the arbitrator, all of its costs and fees. "Costs and
fees' means all reasonable pre-award expense of the arbitration, including the
arbitrator's fees, administrative fees, travel expenses, out-of-pocket expenses
such as copying and telephone, court costs, witness fees and attorneys' fees.
16.8 Neither party nor the arbitrator may disclose the
existence, content, or results of any arbitration hereunder without the prior
written consent of both parties.
16.9 Limited civil discovery shall be permitted for the
production of documents and taking of depositions. All discovery shall be
governed by the California Rules of Civil Procedure. All issues regarding
conformation with discovery requests shall be decided by the arbitrator.
16.10 The arbitration award shall be in writing and shall
specify the factual and legal bases for the award.
16.11 Within twenty days after receipt of Notice of Decision
by the Arbitrator, either party may appeal the arbitration panel(`s) award to an
appellate arbitrator by filing a written Notice of Appeal served on the opposing
party and the arbitrator.
16.12 Within fifteen days after Notice of Appeal, each party
shall select one person to act as appellate arbitrator, and the two selected
shall select a third appellate arbitrator within ten days of their appointment
who will act as sole arbitrator of the dispute. If the arbitrator selected by
the parties is unable or fails to agree upon the third appellate arbitrator, the
third arbitrator shall by appointed by a Superior Court Judge pursuant to
California Code of Civil Procedure section 1281.6 on petition of party to the
Arbitration Agreement.
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16.13 The appellate arbitrator shall be a retired judge of a
court of record in the state in which the arbitration was held.
16.14 Within twenty days after selection of an appellate
arbitrator, a written brief, not to exceed twenty pages, stating the reasons why
the panel's decision should be reversed or modified shall be filed with the
appellate arbitrator and served to the opposing party. The opposing party shall
file with the appellate arbitrator and serve on the appealing party, within
twenty days after receiving the appeal brief, an opposition brief, not to exceed
twenty pages. Either party may request oral argument which must be conducted
within fourteen days following the submission of the final brief. The appellate
arbitration shall be based only on the record of the initial hearing and oral
argument, if any. The appellate arbitrator shall render a written decision
affirming reversing, modifying or remanding the arbitration panel's decision
within thirty days after receiving the final appellate submissions.
16.15 The appellate arbitrator may reverse, modify or remand
the matter for further proceedings by the arbitration panel only on one of the
following grounds:
(1) Any ground specified in 901 et. seq. of the California
Code of Civil Procedure;
(2) If the award contains material errors of applicable law;
(3) If the award is arbitrary or capricious;
(4) If there is a demonstration of bias, prejudice or
undisclosed conflict of interest between the arbitrator and
the prevailing party.
16.16 The appellate arbitrator may render a final decision on
appeal or remand the matter for further proceedings by the arbitration panel.
16.17 The arbitrators shall award to the prevailing party, if
any, as determined by the arbitrators, all of its costs and fees. "Costs and
fees" means all reasonable pre-award expenses of the arbitration, including the
arbitrator's fees, administrative fees, travel expenses, out-of-pocket expenses
such as copying and telephone, court costs, witness fees and attorneys' fees.
17. WAIVER. Waiver by Superior National or Employee of any provision or
any rights under any provision of this Agreement in any instance shall not be
taken as a waiver of any subsequent breach of such provision or as a continuing
waiver of the provision itself.
18. ASSIGNMENT. The rights of Employee hereto shall inure to the
benefit of and be binding upon the successors and assigns of Superior National
consistent with the terms of this Agreement and regardless of the form in which
such succession or assignment takes place. This Agreement and the rights,
interest and benefits hereunder
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are personal to Employee and shall not be assigned, transferred, pledged, or
hypothecated in any way by Employee, and shall not be subject to execution,
attachment or similar process. Any attempted assignment, transfer, pledge, or
hypothecation, or the levy of any execution, attachment of similar process
thereon, shall be null and void and without effect.
19. ATTORNEYS' FEES, COSTS. If either party shall bring an action
against the other party hereto by reason of a breach of any covenant, warranty,
representation or condition herein, or otherwise arising out of this Agreement,
whether for declaratory or other relief, the prevailing party in such suit shall
be entitled to such party's costs of suit and attorneys' fees, which shall be
payable whether or not such action is prosecuted to judgment. Costs and
attorneys fees resulting from any arbitration shall be governed by section 16,
hereof.
20. PARAGRAPH HEADINGS. Paragraph headings are for the purpose of
convenience only and shall not be considered to be any part of this Agreement.
21. COUNTERPARTS. More than one counterpart of this Agreement may be
executed by the parities hereto, and each counterpart shall be deemed an
original, and all counterparts together shall be one agreement.
22. EFFECT OF PARTIAL INVALIDITY. The invalidity of any portion of this
agreement will not and shall not be deemed to affect the validity of any other
provision. In the event that any provision of this agreement is held to be
invalid, the parties agree that the remaining provisions shall be deemed to be
in full force and effect as if they had been executed by both parties subsequent
to the expungement of the invalid provision.
23. LATEST AGREEMENT. This is the latest version of Employee's
Agreement. All prior Employment Agreements are revoked, rescinded and void.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to take
effect the date first stated above.
EMPLOYEE
/s/ Robert E. Nagle Date: 11-17-99
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ROBERT E. NAGLE
SUPERIOR NATIONAL INSURANCE GROUP, INC.
By: /s/ J. Chris Seaman Date: 11-17-99
-------------------------------- ----------------------
J. CHRIS SEAMAN
Title: President & Chief Executive Officer
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By: /s/ William L. Gentz Date: 11-17-99
-------------------------------- ----------------------
WILLIAM L. GENTZ
Title: Chairman of the Board
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ADDENDUM "A"
EMPLOYMENT TERM SHEET - ROBERT E. NAGLE
Position: Senior Vice-President, General Counsel & Secretary
Superior National Insurance Group, Inc. and subsidiaries
Salary: Effective November 17, 1999, $160,000 annually
Car Allowance: $900 per month
Health Insurance: On same terms, conditions and coverages of other
Superior National senior executives.
Expenses: Usual and customary
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