Exhibit 10.1


 


ZENITH NATIONAL INSURANCE CORP.


 


FORM


OF


RESTRICTED STOCK AWARD AGREEMENT


FOR EMPLOYEES


(PERFORMANCE-BASED VESTING)


 


THIS RESTRICTED STOCK AWARD AGREEMENT (the “Award Agreement”) is made and entered into as of «Award_Date» (the “Date of
Grant”), by and between Zenith National Insurance Corp., a Delaware
corporation (the “Company”), and «Name» (the “Grantee”).  Capitalized terms not defined herein shall
have the meaning ascribed to them in the Zenith National Insurance Corp. 2004
Restricted Stock Plan, as may be amended and restated from time to time and in
effect at the time of this Award Agreement (the “Plan”).  Where the context permits, references to the
Company or any of its Subsidiaries shall include the successors to the
foregoing.


 


Pursuant to the Plan, the Administrator has
determined that the Grantee is to be granted Restricted Stock, subject to the
terms, conditions and restrictions set forth in the Plan and herein, and hereby
grants such Restricted Stock.


 


1.             Grant of Restricted Stock.  The Company hereby grants to the Grantee «Award1» shares of Restricted Stock (the “Award”) on the terms, conditions and restrictions set forth
in this Award Agreement and as otherwise provided in the Plan.


 


2.             Purchase Price; Method of Payment.  The purchase price per share of Restricted
Stock shall be $1.00.  The purchase price
may be paid (i) in cash or its equivalent, (ii) shares of
unrestricted Stock owned by the Grantee for greater than six (6) months,
the Fair Market Value of which on the purchase date is equal to the purchase
price of the Restricted Stock, (iii) to the extent permitted by law,
cancellation of indebtedness, (iv) services rendered or (v) any
combination of the foregoing.  In the
absence of any other form of payment tendered by the Grantee, the purchase
price shall be paid by services rendered.


 


3.             Restrictions with Respect to Restricted Stock.


 


(a)           Restrictions.  The Restricted Stock granted hereunder and
any interest therein, may not be sold, transferred, pledged, hypothecated,
assigned or otherwise disposed of, except by will or the laws of descent and
distribution, prior to the lapsing of restrictions set forth in the Plan and
this Award Agreement.  Any attempt to
dispose of any Restricted Stock in contravention of any such restrictions shall
be null and void and without effect.


 


(b)           Restricted Period; Lapse of Restrictions.  Except as otherwise provided in the Plan or
this Award Agreement, the restrictions set forth in Paragraph 3(a) shall
lapse with respect to the shares of Restricted Stock granted hereunder on the
Determination Date (as


 

















 


defined below) provided that both of the following conditions are
met:  (i)  the Grantee continues to
be employed by the Company or any Subsidiary as of such Determination Date and (ii) the
Company Combined Ratio (as defined below) for the [three future] fiscal year
period ended December 31, [     ] is
at least [five] percentage points below the average Industry Combined Ratio for
the [    ], [    ] and [   
] fiscal years.  For the purposes
of this provision, “Company Combined Ratio” for a period shall mean the total
combined ratio for the workers’ compensation operations of the Company for such
period as determined from the consolidated statutory financial statements of
the property and casualty insurance subsidiaries of the Company; “Industry
Combined Ratio” for a fiscal year shall mean the combined ratio for the workers’
compensation insurance industry, as a whole, based on actual and projected
statutory financial statements for such fiscal year as published or announced
by any independent organization; and “Determination Date” shall mean either [February 15,
   ], or such later date that the Compensation
Committee determines to be necessary in order to accurately calculate to a
reasonable degree whether the vesting conditions have been met.


 


4.             Form of Restricted Stock.  The Company may, in its discretion, reflect
ownership of Restricted Stock through the issuance of stock certificates, in
book-entry form or any combination thereof, in accordance with Section 5(e) of
the Plan.


 


5.             Unrestricted Shares.  Promptly after each lapse of restrictions
relating to the Restricted Stock without forfeiture, and provided that the
Grantee shall have complied with his or her obligations under Paragraph 9
hereof, the Company shall, with respect to such Unrestricted Shares:


 


(a)           If such Unrestricted Shares were initially issued in
certificated form, issue to the Grantee or the Grantee’s personal
representative a stock certificate representing a number of shares of Stock,
free of the restrictive legend described in Paragraph 7, equal to the number of
shares of Restricted Stock with respect to which such restrictions have
lapsed.  If certificates representing
such Restricted Stock shall have theretofore been delivered to the Grantee,
such certificates shall be returned to the Company, complete with any necessary
signatures or instruments of transfer prior to the issuance by the Company of
such unlegended shares of Stock; or


 


(b)           If such Unrestricted Shares were initially issued in
book-entry form, transfer such Unrestricted Shares to the Grantee in the form
and registration as indicated by the Grantee.


 


6.             Rights as a Stockholder.  Subject to the restrictions set forth in the
Plan and this Award Agreement, the Grantee shall possess all incidents of
ownership with respect to the Restricted Stock granted hereunder, including the
right to vote such Restricted Stock and the right to receive dividends (whether
ordinary, extraordinary or in kind) with respect to such Restricted Stock;
provided, however, that all dividends accrued on shares of Restricted Stock
while they are still subject to the restrictions set forth in Paragraph 3(a) will
not be paid by the Company to the Grantee until the restrictions with respect
to such shares have lapsed in accordance with Paragraph 3(b).


 

















 


If the restrictions set forth in Paragraph 3(a) do
not lapse in accordance with Paragraph 3(b), then, as of the date that it is
determined that the restrictions will not lapse, (a) the Restricted Stock
shall be cancelled, (b) the Grantee shall possess no further incidents of
ownership of such Restricted Stock and (c) the Grantee shall not be
entitled to any of the dividends accrued on the shares of Restricted Stock
while they were subject to the restrictions set forth in Paragraph 3(a).


 


7.             Certificate; Restrictive Legend.  Any certificate issued for Restricted Stock
prior to the lapse of any outstanding restrictions relating thereto shall be
inscribed with the following legend, or such other legend as determined by the
Administrator:


 


THIS CERTIFICATE AND THE SHARES OF STOCK
REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS, INCLUDING
FORFEITURE PROVISIONS AND RESTRICTIONS AGAINST TRANSFER (THE “RESTRICTIONS”),
CONTAINED IN THE ZENITH NATIONAL INSURANCE CORP. AMENDED AND RESTATED 2004
RESTRICTED STOCK PLAN AND THE RESTRICTED STOCK AWARD AGREEMENT ENTERED INTO
BETWEEN THE REGISTERED OWNER AND THE COMPANY. 
ANY ATTEMPT TO DISPOSE OF THESE SHARES IN CONTRAVENTION OF THE
RESTRICTIONS, INCLUDING BY WAY OF SALE, ASSIGNMENT, TRANSFER, PLEDGE,
HYPOTHECATION OR OTHERWISE, SHALL BE NULL AND VOID AND WITHOUT EFFECT.


 


8.             Termination of Employment.  Except as may otherwise be set forth in this
Award Agreement or the Plan [or the written Employment Agreement, if any,
between the Grantee and the Company or its subsidiary], the following
provisions shall apply upon the termination of Grantee’s employment:


 


(a)           Upon the Grantee’s death or termination of employment due to
Disability, the restrictions set forth in Paragraph 3(a) shall lapse.


 


(b)           Upon termination of the Grantee’s employment with the Company
or any Subsidiary thereof for any reason (other than death or Disability) prior
to the lapsing of restrictions with respect to any portion of the Restricted
Stock granted hereunder, the Grantee shall forfeit any rights to the shares of
Restricted Stock with respect to which the restrictions have not lapsed and
shall have no further rights thereto.


 


(c)           Upon forfeiture of any shares of Restricted Stock, to the
extent the Grantee paid the purchase price of such forfeited shares in a manner
other than services rendered, the Company shall repurchase such shares from the
Grantee at a price per share equal to the lesser of (i) the Fair Market
Value of such shares at the time of forfeiture or (ii) the price Grantee
paid for such shares initially.


 


9.             Taxes.  Pursuant to Section 9(d) of the
Plan, the Company (or Subsidiary, as the case may be) may require the Grantee
to remit to the Company (or Subsidiary, as the case may be) in cash an amount
sufficient to satisfy any federal, state and local tax withholding requirements
related to the Award.  With the approval
of the Administrator, the Grantee may satisfy the foregoing requirement by electing
to have the Company withhold from delivery shares of Stock or by delivering
shares of Stock already owned by the Grantee for at least 6 


 

















 


months, in each case, having a value equal to the minimum amount of tax
required to be withheld.  Such shares
shall be valued at their Fair Market Value on the date on which the amount of
tax to be withheld is determined, and fractional share amounts shall be settled
in cash.  Such an election may be made
with respect to all or any portion of the shares of Stock to be delivered
pursuant to the Award.


 


The Grantee shall promptly notify the Company
of any election made pursuant to Section 83(b) of the Internal
Revenue Code of 1986, as amended.


 


10.           Adjustments.  The Award and all rights and obligations
under this Award Agreement are subject to Section 3 of the Plan.


 


11.           Notices.  Whenever any notice is required or permitted
hereunder, such notice shall be in writing and shall be given by personal
delivery or first class, certified or registered mail with return receipt
requested.  Any notice required or
permitted to be delivered hereunder shall be deemed to have been duly given on
the date which it is personally delivered or, whether actually received or not,
on the third business day after mailing to the respective parties named below.


 


	
  If to the Company:

  	
  Zenith National Insurance Corp.

  
	
   

  	
  21255 Califa St

  
	
   

  	
  Woodland Hills, CA 91367

  
	
   

  	
  Attn.: Michael E. Jansen, Executive Vice President

  
	
   

  	
  and General Counsel

  
	
   

  	
  Facsimile: 818-713-0177

  
	
   

  	
   

  
	
  If to the Grantee:

  	
  «Name»

  
	
   

  	
  «Address_Line_1»

  
	
   

  	
  «City_State_Zip»

  



 


Either party may change such party’s address
for notices by duly giving notice pursuant hereto.


 


12.           Compliance with Laws.


 


(a)           Shares of Stock shall not be issued pursuant to the Award
granted hereunder unless the issuance or delivery of such shares pursuant thereto
shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933 (the “Securities
Act”) and the Exchange Act, shall be subject to the requirements of
any stock exchange upon which the Stock may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.  The Company shall be under
no obligation to effect the registration pursuant to the Securities Act, of any
interests in the Plan or any shares of Stock to be issued hereunder or to
effect similar compliance under any state laws.


 


(b)           All certificates for shares of Stock delivered under the Plan
shall be subject to such stop-transfer orders and other restrictions as the
Administrator may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange 


 

















 


Commission, any stock exchange upon which the Stock may then
be listed, and any applicable federal or state securities law, and the
Administrator may cause a legend or legends to be placed on any such
certificates to make appropriate reference to such restrictions.  The Administrator may require, as a condition
of the issuance or delivery of certificates evidencing shares of Stock pursuant
to the terms hereof, that the recipient of such shares make such agreements and
representations as the Administrator, in its sole discretion, deems necessary
or desirable.


 


13.           Protections Against Violations of Agreement.  No purported sale, assignment, mortgage,
hypothecation, transfer, pledge, encumbrance, gift, transfer in trust (voting
or other) or other disposition of, or creation of a security interest in or
lien on, any of the shares of Stock underlying the Award by any holder thereof
in violation of the provisions of this Award Agreement, the Plan or the
certificate of incorporation or the bylaws of the Company, will be valid, and
the Company will not transfer any such shares on its books nor will any such
shares be entitled to vote, nor will any dividends be paid thereon, unless and
until there has been full compliance with such provisions to the satisfaction
of the Company.  The foregoing
restrictions are in addition to and not in lieu of any other remedies, legal or
equitable, available to enforce said provisions.


 


14.           Failure to Enforce Not a Waiver.  The failure of the Company to enforce at any
time any provision of the Award Agreement shall in no way be construed to be a
waiver of such provision or of any other provision hereof.


 


15.           Governing Law.  The Award Agreement shall be governed by and
construed according to the laws of the State of Delaware without regard to its
principles of conflict of laws.


 


16.           Incorporation of the Plan.   The Plan, as it exists on the date of the
Award Agreement and as amended from time to time, is hereby incorporated by
reference and made a part hereof, and the Award and this Award Agreement shall
be subject to all terms and conditions of the Plan.  In the event of any conflict between the
provisions of the Award Agreement and the provisions of the Plan, the terms of
the Plan shall control, except as expressly stated otherwise.  The term “Section” generally refers to
provisions within the Plan (except where denoted otherwise); provided, however,
the term “Paragraph” shall refer to a provision of this Award Agreement.


 


17.           Amendments.  This Award Agreement may be amended or
modified at any time, but only by an instrument in writing signed by each of
the parties hereto.


 


18.           Counterparts.        This Award Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.


 


19.           Invalid Provision.   The invalidity or unenforceability of any
particular provision hereof shall not affect the other provisions hereof, and
this Award Agreement shall be construed in all respects as if such invalid or
unenforceable provision had been omitted.


 


20.           Entire Agreement.    This Award Agreement and the Plan, as it
exists on the date of this Award Agreement and as amended from time to time, [and
the written Employment Agreement, if any, between the Grantee and the Company
or its subsidiary] contain the entire 


 

















 


agreement and understanding of the parties hereto with respect to the
subject matter contained herein and therein and supersede all prior
communications, representations and negotiations in respect thereto.


 


21.           Captions and Headings.   The captions and headings of the paragraphs
and subparagraphs of this Award Agreement are provided for convenience only and
are not to serve as a basis for interpreting or construing this Award
Agreement.


 


22.           Agreement Not a Contract of Employment.  Neither the Plan, the granting of the Award,
the Award Agreement nor any other action taken pursuant to the Plan shall
constitute or be evidence of any agreement or understanding, express or
implied, that the Grantee has a right to continue to be employed by, or to
provide services as a director, consultant or advisor to, the Company, any
Subsidiary or affiliate thereof for any period of time or at any specific rate
of compensation.


 


23.           Authority of the Administrator.  The Administrator shall have full authority
to interpret and construe the terms of the Plan and the Award Agreement.  The determination of the Administrator as to
any such matter of interpretation or construction shall be final, binding and
conclusive.


 


24.           Binding Effect.  The Award Agreement shall apply to and bind
the Grantee and the Company and their respective permitted assignees or
transferees, heirs, legatees, executors, administrators and legal successors.


 


25.           Tax Representation.  The Grantee has reviewed with his or her own
tax advisors the federal, state, local and foreign tax consequences of the
transactions contemplated by this Award Agreement.  The Grantee is relying solely on such
advisors and not on any statement or representations of the Company or any of
its agents.  The Grantee understands that
he or she (and not the Company) shall be responsible for any tax liability that
may arise as a result of the transactions contemplated by the Award Agreement.


 


26.           Acceptance.  The Grantee hereby acknowledges receipt of a
copy of the Plan, the prospectus and this Award Agreement.  Grantee has read and understands the terms
and provisions thereof, and accepts the Award subject to all the terms and
conditions of the Plan and the Award Agreement.


 


IN WITNESS WHEREOF, the parties hereto have
executed and delivered the Award Agreement as of the day and year first above
written.


 

















 


	
   

  	
  ZENITH NATIONAL INSURANCE
  CORP.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  [                                 ]

  
	
   

  	
  Title: 

  	
  [                                 ]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GRANTEE

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature:

  	
   

  
	
   

  	
  Name:

  	
  «Name»

  
	
   

  	
  Address:

  	
  «Address_Line_1»

  
	
   

  	
   

  	
  «City_State_Zip»

  
	
   

  	
  Social Security No.: «SSN»

  
	
   

  	
   

  	
   

  
	
   

  	
  Date: