Exhibit 10.4

 

DESCRIPTION OF COMPENSATION OF NON-EMPLOYEE DIRECTORS
(updated February 2006)

 

The following is a description of the compensation payable to non-employee
Directors of Zenith National Insurance Corp. (the “Company”). It is provided
pursuant to Paragraph 10(iii) to Item 601 of Regulation S-K, which requires a
written description of a compensatory arrangement when no formal document
contains the compensation information.

 

Directors of the Company are elected annually.

 

Employee Directors receive no additional compensation for serving on the Board
of Directors. Non-employee Directors are compensated as follows:

 

For service as a Director:

 

An annual cash fee of $75,000 plus an annual award of 2,250 shares of restricted
Company Common Stock to be granted after each annual election (or a prorated
number of shares if a Director is appointed other than at the annual meeting).
Each such award would vest 750 shares per year for three years, so long as the
recipient remains a Director.

 

In addition to the above compensation, the following fees are paid for committee
service:

 

Committees, other than the Audit Committee:

 

An annual cash fee of $31,250

 

 

 

Audit Committee, other than Chairman:

 

An annual cash fee of $33,750

 

 

 

Audit Committee Chairman:

 

An annual cash fee of $41,250

 

 

Directors are also reimbursed all out of pocket expenses incurred by them in
connection with their service.

 

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