1
<PAGE>



                                                                   EXHIBIT  10.9


                                         [FORM OF RETENTION AGREEMENT
                             FOR MESSRS. MELLIN AND POLAK]
                                             ARGONAUT GROUP, INC.
                                             250 Middlefield Road
                                         Menlo Park, California 94025




February __, 1998

Mr. [______________]
Argonaut Group, Inc.
250 Middlefield Road
Menlo Park, CA 94025


Dear [_________]:

               This letter sets forth the agreement  (the  "Agreement")  between
you and Argonaut Group, Inc. (the "Company")  regarding  severance  payments and
related  benefits if your  employment  terminates in connection with a Change in
Control (as defined below).

                                                     ARTICLE I
                                                    DEFINITIONS

1.1     Definitions

    Whenever used in this Agreement,  the following capitalized terms shall have
    the meanings set forth in this Section 1.1, certain other  capitalized terms
    being defined elsewhere in this Agreement:

    (a)  "Board" means the Board of Directors of the Company.

    (b) "Change in Control" shall mean the occurrence of any of the following:

   (i)Any "Person" or "Group" (as such terms are defined in Section 13(d) of the
    Securities  Exchange  Act of 1934  (the  "Exchange  Act")  and the rules and
    regulations  promulgated  thereunder) is or becomes the  "Beneficial  Owner"
    (within  the  meaning of Rule 13d-3  under the  Exchange  Act),  directly or
    indirectly,  of securities of the Company, or of any entity resulting from a
    merger or consolidation involving the Company,  representing more than fifty
    percent  (50%)  of  the  combined  voting  power  of  the  then  outstanding
    securities of the Company or such entity.

   (ii)    The individuals who, as of the date hereof, are members of the Board

10.9-1

                                       2
<PAGE>


                                                                  EXHIBIT  10.9
(the"Existing Directors"),  cease, for any reason, to constitute more than fifty
    percent  (50%) of the  number of  authorized  directors  of the  Company  as
    determined  in  the  manner  prescribed  in  the  Company's  Certificate  of
    Incorporation  and  Bylaws;  provided,  however,  that if the  election,  or
    nomination for election,  by the Company's  stockholders of any new director
    was  approved  by a vote of at least  fifty  percent  (50%) of the  Existing
    Directors,  such new  director  shall be  considered  an Existing  Director;
    provided  further,  however,  that no  individual  shall  be  considered  an
    Existing Director if such individual initially assumed office as a result of
    either an actual or  threatened  "Election  Contest"  (as  described in Rule
    14a-11  promulgated  under the Exchange  Act) or other actual or  threatened
    solicitation  of proxies  by or on behalf of anyone  other than the Board (a
    "Proxy Contest"),  including by reason of any agreement intended to avoid or
    settle any Election Contest or Proxy Contest.

(iii) The consummation of (x) a merger, consolidation or reorganization to
which the Company is a party,  whether or not the Company is the Person  
    surviving  or
    resulting therefrom,  or (y) a sale, assignment,  lease, conveyance or other
    disposition of all or substantially all of the assets of the Company, in one
    transaction  or a series of related  transactions,  to any Person other than
    the Company, where any such transaction or series of related transactions as
    is referred to in clause (x) or clause (y) above in this subparagraph  (iii)
    (a  "Transaction")  does not  otherwise  result  in a  "Change  in  Control"
    pursuant to  subparagraph  (i) of this  definition  of "Change in  Control";
    provided,  however,  that no such Transaction  shall constitute a "Change in
    Control"  under  this  subparagraph  (iii)  if  the  Persons  who  were  the
    stockholders  of the Company  immediately  before the  consummation  of such
    Transaction   are  the   Beneficial   Owners,   immediately   following  the
    consummation  of such  Transaction,  of fifty  percent  (50%) or more of the
    combined  voting  power of the then  outstanding  voting  securities  of the
    Person   surviving  or   resulting   from  any  merger,   consolidation   or
    reorganization referred to in clause (x) above in this subparagraph (iii) or
    the Person to whom the assets of the  Company  are sold,  assigned,  leased,
    conveyed or disposed of in any transaction or series of related transactions
    referred in clause (y) above in this subparagraph (iii).

    (c) "Company" means Argonaut Group,  Inc., a Delaware  corporation,  and any
    successor or assignee as provided in Article V.

    (d) "Compensation"  means and includes all of your base salary  attributable
    to  your  employment  with  the  Company  and/or  any  of  its  Subsidiaries
    (including,  but not  limited  to, any  amounts  excludable  from your gross
    income for federal  income tax  purposes  pursuant to Section 125 or Section
    401(k)  of the  Internal  Revenue  Code of  1986,  as  amended),  in  effect
    immediately  before a Change in  Control.  "Compensation"  shall not include
    your bonuses or other cash or non-cash  compensations or reimbursements,  if
    any (e.g., the grant or vesting of restricted stock, the grant,  vesting, or
    exercise of stock options, automobile allowance and gasoline reimbursement).

    (e) "Disability"  means a physical or mental  infirmity which  substantially
    impairs  your  ability to perform  your  material  duties for a period of at
    least one hundred eighty (180)  consecutive  calendar days, and, as a result
    of  such  Disability,  you  have  not  returned  to your  full-time  regular
    employment prior to termination.


10.9-2



                                       3
<PAGE>


                                                                  EXHIBIT  10.9

    (f) "Effective Time" means February __, 1998.
    (g) "ERISA" means the Employee  Retirement  Income  Security Act of 1974, as
amended.

    (h) "Good Reason" means the  occurrence,  on or after the Effective Time, of
any of the following:

                             (i)    The  Company  or  any  of  its  Subsidiaries
                                    reduces  your  Compensation  as in effect on
                                    the Effective Time.

                            (ii)    Without your express  written  consent,  the
                                    Company or any of its Subsidiaries  requires
                                    you to change  the  location  of your job or
                                    office,  so  that  you  will be  based  at a
                                    location more than fifty (50) miles from the
                                    location  of  your  job  or  office  on  the
                                    Effective Time.

                           (iii)    A successor to the Company  fails or refuses
                                    to assume  the  obligations  of the  Company
                                    under this Agreement.

                            (iv)    The Company or any successor breaches any of
                                    the material provisions of this Agreement.

         (i)      "Just Cause" means the  termination  of your  employment  as a
                  result of (i) fraud,  misappropriation  of or intentional  and
                  material  damage to the  property  or  business of the Company
                  (including  its  Subsidiaries),  (ii)  conviction  of a felony
                  involving moral turpitude,  (iii) material neglect, failure or
                  refusal to follow the reasonable  directions of the Board,  to
                  perform  the duties  reasonably  assigned to you, or to follow
                  material  Company  policies,  if you do not begin to cure such
                  neglect,  failure  or  refusal  within  ten  (10)  days  after
                  receiving written notice from the Company to do so.

         (j)      "Person" shall have the meaning set forth in the definition
                     of 
                    "Change in Control."

         (k)      "Release" means the Separation and General  Release  Agreement
                  in the form attached hereto as Exhibit "A".

         (l) "Severance Payment" means the payment of severance  compensation as
provided in Article III.

         (m)      "Subsidiary" means any corporation or other Person, a majority
                  of the voting power,  equity  securities or equity interest of
                  which is owned directly or indirectly by the Company.

         (n)     "WARN" means the Worker Adjustment and Retraining 
                    Notification
                    Act, 29 U.S.C. ss. 2101 et seq.

                                                  ARTICLE II
                                             EXCISE TAX LIMITATION
10.9-3

                                       4
<PAGE>


                                                                   EXHIBIT  10.9
2.1      Limitation

         Notwithstanding  anything  contained in this Agreement to the contrary,
in the event  that any  payment  or  benefit  (within  the  meaning  of  Section
280G(b)(2)  of the  Code)  to you  or  for  your  benefit  paid  or  payable  or
distributed  or  distributable  pursuant  to the  terms  of  this  Agreement  or
otherwise  in  connection  with,  or arising  out of, your  employment  with the
Company or any of its  Subsidiaries or a Change of Control within the meaning of
Section 280G of the Code (a "Payment"  or  "Payments"),  would be subject to the
excise tax  imposed by Section  4999 of the Code (the  "Excise  Tax"),  then the
Payments shall be reduced (but not below zero) but only to the extent  necessary
that no portion  thereof  shall be subject to the excise tax  imposed by Section
4999 of the Code (the "Section  4999 Limit").  Unless you shall have given prior
written  notice  specifying a different  order to the Company to effectuate  the
limitations  described in the  preceding  sentence,  the Company shall reduce or
eliminate  the  Payments by first  reducing  or  eliminating  those  Payments or
benefits which are not payable in cash and then by reducing or eliminating  cash
Payments,  in each case in reverse  order  beginning  with  payments or benefits
which are to be paid the farthest in time from the Determination (as hereinafter
defined).  Any notice given by you pursuant to the preceding sentence shall take
precedence  over the  provisions  of any other plan,  arrangement  or  agreement
governing your rights and entitlements to any benefits or compensation.

2.2      Determinations

         All determinations  required to be made under this Article III (each, a
"Determination")  shall be  made,  at the  Company's  expense,  by a  nationally
recognized  accounting firm designated by the Company and reasonably  acceptable
to  you  (the  "Accounting   Firm").  The  Accounting  Firm  shall  provide  its
calculations,  together  with  detailed  supporting  documentation,  both to the
Company  and to you  before  payment of your  Severance  Payment  hereunder  (if
requested at that time by the Company or you) or such other time as requested by
the Company or you (in either case  provided  that the Company or you believe in
good faith that any of the Payments may be subject to the Excise Tax); provided,
however, that if the Accounting Firm determines that no Excise Tax is payable by
you with respect to a Payment or Payments,  it shall furnish you with an opinion
reasonably  acceptable to you that no Excise Tax will be imposed with respect to
any such Payment or Payments.  Within ten (10)  calendar days of the delivery of
the  Determination to you, you shall have the right to dispute the Determination
(the  "Dispute").  The existence of any Dispute shall not in any way affect your
right to receive the Payments in accordance with the Determination.  If there is
no Dispute, the Determination by the Accounting Firm shall be final, binding and
conclusive upon the Company and you, subject to the application of Section 2.3.

2.3      Adjustments

         As a result of the  uncertainty in the application of Sections 4999 and
280G of the Code, it is possible that the Payments either will have been made or
will not have been made by the Company,  in either case in a manner inconsistent
with  the  limitations   provided  in  Section  2.1  (an  "Excess   Payment"  or
"Underpayment",  respectively).  If it is  established  pursuant  to (i) a final
determination  of a court for  which all  appeals  have been  taken and  finally
resolved or the time for all appeals has  expired,  or (ii) an Internal  Revenue
Service (the "IRS") proceeding which has been finally and conclusively resolved,
that an Excess  Payment has been made,  such Excess  Payment shall be deemed for
all purposes to be a loan to you made on the date you received the 

10.9-4

                                       5
<PAGE>

    EXHIBIT  10.9

Excess  Payment and you shall repay the Excess Payment to the Company on demand,
together  with  interest  on the Excess  Payment at one hundred  twenty  percent
(120%) of the  applicable  federal  rate (as  defined in Section  1274(d) of the
Code)  compounded  semi-annually  from the date of your  receipt of such  Excess
Payment  until  the  date  of such  repayment.  If it is  determined  (i) by the
Accounting  Firm,  the Company  (which shall  include the position  taken by the
Company, together with its consolidated group, on its federal income tax return)
or the IRS,  (ii)  pursuant  to a  determination  by a court,  or (iii) upon the
resolution  to  your  satisfaction  of the  Dispute,  that an  Underpayment  has
occurred,  the  Company  shall pay an amount  equal to the  Underpayment  to you
within ten (10) calendar days of such determination or resolution, together with
interest on such amount at one hundred  twenty  percent (120%) of the applicable
federal rate compounded semi-annually from the date such amount should have been
paid to you pursuant to the terms of this  Agreement or  otherwise,  but for the
operation of this Section 2.3, until the date of payment.


                                                    ARTICLE III
                                                SEVERANCE PAYMENTS

3.1      Right to Severance Payment; Release

         Conditioned  on the execution and delivery by you (or your  beneficiary
or personal representative, if applicable) of the Release, you shall be entitled
to receive a  Severance  Payment  from the  Company in the  amount  provided  in
Section 3.2 if (a) you are an active  employee of the Company or any  Subsidiary
on the Effective  Time, and (b) within eighteen (18) months after the occurrence
of a Change in Control,  your  employment  is  involuntarily  terminated  by the
Company or any of its  Subsidiaries for any reason other than Just Cause or your
death or  Disability,  or you  voluntarily  terminate your  employment  with the
Company and all  Subsidiaries  for Good Reason  within sixty (60) days after the
occurrence  of such Good  Reason.  For  purposes of clause (a) of the  preceding
sentence, you will still be considered to be an active employee on the Effective
Time if you are then on sick leave, military leave or any other leave of absence
approved  by  the  Company  or  any of  its  Subsidiaries.  Notwithstanding  the
foregoing, you will not be entitled to receive a Severance Payment to the extent
you receive  payments which the Company or its Subsidiaries are required to make
to you under WARN.

3.2      Amount of Severance Payment

         If you become entitled to a Severance Payment under this Agreement, the
amount of your Severance  Payment,  when added to any payments which the Company
or its  Subsidiaries are required to make to you under WARN, shall equal the sum
of:

                  (a) [two and one-half (2-1/2) for Mr. Mellin] [one (1) for Mr.
Polak] times your annual Compensation; plus
(b)the amount of your annual bonus for the fiscal year of the Company preceding



10.9-5

                                       6
<PAGE>

    EXHIBIT  10.9

the fiscal year in which the Change in Control occurs.

3.3      No Mitigation

         The  Company  acknowledges  and agrees  that you shall be  entitled  to
receive your entire  Severance  Payment  regardless  of any income which you may
receive from other sources  following your termination on or after the Effective
Time.

3.4      Payment of Severance Payment

         The Severance  Payment to which you are entitled  shall be paid to you,
in cash and in full, not later than eight (8) calendar days after  execution and
delivery by you (or your beneficiary or personal representative,  if applicable)
of the Release Agreement,  but in no event before the date on which such Release
becomes effective. If you should die before all amounts payable to you have been
paid, such unpaid amounts shall be paid to your beneficiary under this Agreement
or, if you have not designated such a beneficiary in writing to the Company,  to
the personal representative(s) of your estate.

3.5      Health Benefits Coverage

         If you are entitled to receive a Severance  Payment  under Section 3.1,
you will also be entitled to receive health  benefits  coverage for you and your
dependents under the same plan(s) or arrangement(s) under which you were covered
immediately  before your  termination  of employment or plan(s)  established  or
arrangement(s)  provided by the Company or any of its  Subsidiaries  thereafter.
Such  health  benefits  coverage  shall be paid for by the  Company  to the same
extent as if you were still employed by the Company, and you will be required to
make such  payments as you would be required to make if you were still  employed
by the Company.  The  benefits  provided  under this Section 3.5 shall  continue
until the earlier of (a) the  expiration of [two and one-half  (2-1/2) years for
Mr. Mellin] [one (1) year for Mr. Polak]  following the date of your termination
of  employment,  or (b) the date you become covered under any other group health
plan  not  maintained  by the  Company  or any  of its  Subsidiaries;  provided,
however,  that if  such  other  group  health  plan  excludes  any  pre-existing
condition  that you or your  dependents  may have when coverage under such group
health  plan  would  otherwise  begin,  coverage  under this  Section  3.5 shall
continue (subject to the [two and one-half (2-1/2) for Mr. Mellin] [one (1) year
for Mr. Polak]  limitation of clause (a) of this  sentence) with respect to such
pre-existing  condition  until such exclusion under such other group health plan
lapses or  expires.  In the event you are  required  to make an  election  under
Sections 601 through 607 of ERISA  (commonly  known as COBRA) to qualify for the
benefits  described in this Section 3.5, the  obligations of the Company and its
Subsidiaries under this Section 3.5 shall be conditioned upon your timely making
such an election.

3.6      Automobile

         If you become  entitled to receive a Severance  Payment  under  Section
3.1, and you then have the use of an  automobile  that is provided to you at the
expense of the Company or any Subsidiary,  you shall have the right,  for ninety
(90) days following your termination of

10.9-6

                                       7
<PAGE>



    EXHIBIT  10.9

employment,  (a) to  continue  your use of the  automobile  on the same basis on
which you used it immediately  before your termination of employment,  or (b) to
purchase the  automobile  from the Company or  Subsidiary  for its low wholesale
bluebook value,  or, if the Company or Subsidiary has leased the automobile,  to
assume the lease, or (c) to take the actions described in clauses (a) and (b) of
this sentence.

3.7      Withholding of Taxes

         The Company may withhold from any amounts  payable under this Agreement
all  federal,  state,  city or other  taxes  required  by  applicable  law to be
withheld by the Company.


                                                    ARTICLE IV
                                      OTHER RIGHTS AND BENEFITS NOT AFFECTED

4.1      Other Benefits

         This  Agreement  does not  provide  a  pension  for you,  nor shall any
payment hereunder be characterized as deferred compensation. Except as set forth
in Section 4.2,  neither the  provisions  of this  Agreement  nor the  Severance
Payment provided for hereunder shall reduce any amounts otherwise payable, or in
any way diminish your rights as an employee,  whether existing now or hereafter,
under any written benefit, incentive,  retirement,  stock option, stock bonus or
stock purchase plan or any written employment agreement or other written plan or
arrangement not related to severance.

4.2      Other Severance Agreements Superseded

         As of the Effective  Time,  this  Agreement  will supersede any and all
other  severance  plans  of  the  Company  or  its  Subsidiaries  and  severance
agreements  between  you  and  the  Company  and  its  Subsidiaries,   and  your
participation  in any other  severance plan of the Company and its  Subsidiaries
will be hereby terminated.

4.3  Employment Status

         This  Agreement  does not constitute a contract of employment or impose
on you any obligation to remain in the employ of the Company, nor does it impose
on the Company or any of its  Subsidiaries  any obligation to retain you in your
present or any other position,  nor does it change the status of your employment
as an employee at will.  Nothing in this  Agreement  shall in any way affect the
right of the Company or any of its  Subsidiaries  in its absolute  discretion to
change or reduce your  compensation at any time, or to change at any time one or
more benefit plans,  including but not limited to pension  plans,  dental plans,
health care plans,  savings plans, bonus plans,  vacation pay plans,  disability
plans, and the like.




10.9-7

                                       8
<PAGE>

    EXHIBIT  10.9

                                                     ARTICLE V
                                               SUCCESSOR TO COMPANY

         The Company shall require any successor or assignee,  whether direct or
indirect,  by  purchase,   merger,   consolidation  or  otherwise,   to  all  or
substantially  all  the  business  or  assets  of  the  Company,  expressly  and
unconditionally  to assume and agree to perform the Company's  obligations under
this Agreement, in the same manner and to the same extent that the Company would
be required to perform if no such  succession or assignment had taken place.  In
such event, the term "Company," as used in this Agreement,  shall mean (from and
after,  but not  before,  the  occurrence  of such  event) the Company as herein
before  defined and any successor or assignee to the business or assets which by
reason hereof becomes bound by the terms and provisions of this Agreement.


10.9-8

                                       9
<PAGE>


    EXHIBIT  10.9

                                                    ARTICLE VI
                                                  CONFIDENTIALITY

6.1      Nondisclosure of Confidential Material

         In the performance of your duties,  you have previously had, and may in
the future have, access to confidential records and information,  including, but
not limited to, development, marketing, purchasing,  organizational,  strategic,
financial, managerial, administrative,  manufacturing,  production, distribution
and sales information,  data, specifications and processes presently owned or at
any time hereafter developed by the Company or its agents or consultants or used
presently or at any time  hereafter in the course of its business,  that are not
otherwise part of the public domain (collectively, the "Confidential Material").
All such Confidential  Material is considered secret and has been and/or will be
disclosed to you in confidence.  By your  acceptance of your  Severance  Payment
under  this  Agreement,  you  shall  be  deemed  to have  acknowledged  that the
Confidential Material constitutes  proprietary  information of the Company which
draws independent economic value, actual or potential,  from not being generally
known to the public or to other persons who could obtain economic value from its
disclosure or use, and that the Company has taken efforts  reasonable  under the
circumstances, of which this Section 6.1 is an example, to maintain its secrecy.
Except in the performance of your duties to the Company, you shall not, directly
or indirectly for any reason  whatsoever,  disclose or use any such Confidential
Material, except that the foregoing disclosure prohibition shall not apply as to
Confidential  Material that (i) has been  publicly  disclosed or was within your
possession  prior  to its  being  furnished  to you by the  Company  or  becomes
available to you on a  nonconfidential  basis from a third party (in any of such
cases,  not due to a breach  by you of your  obligations  to the  Company  or by
breach  of  any  other  person  of a  confidential,  fiduciary  or  confidential
obligation,  the breach of which you know or reasonably  should  know),  (ii) is
required to be  disclosed  by you  pursuant to  applicable  law, and you provide
notice to the Company of such requirement as promptly as possible,  or (iii) was
independently  acquired  or  developed  by  you  without  violating  any  of the
obligations under this Agreement and without relying on Confidential Material of
the Company.  All  records,  files,  drawings,  documents,  equipment  and other
tangible  items,  wherever  located,  relating  in any  way to the  Confidential
Material or otherwise to the Company's business,  which you have prepared,  used
or encountered or shall in the future  prepare,  use or encounter,  shall be and
remain the Company's  sole and  exclusive  property and shall be included in the
Confidential Material.  Upon your termination of employment with the Company, or
whenever requested by the Company, you shall promptly deliver to the Company any
and  all of  the  Confidential  Material  and  copies  thereof,  not  previously
delivered to the Company, that may be, or at any previous time has been, in your
possession or under your control.

6.2      Nonsolicitation of Employees

         By your acceptance of your Severance Payment under this Plan, you agree
that,  for a period of two (2) years  following  your  termination of employment
with the  Company or its  Subsidiaries,  neither you nor any Person or entity in
which you have an interest shall solicit any person who was employed on the date
of your  termination of employment by the Company or any of its  Subsidiaries to
leave the employ of the Company or any of its Subsidiaries. Nothing in

10.9-9

                                       10
<PAGE>

EXHIBIT  10.9

this Section 6.2,  however,  shall prohibit you or any Person or entity in which
you have an interest  from  placing  advertisements  in  periodicals  of general
circulation soliciting applications for employment, or from employing any person
who answers any such advertisement.  For purposes of this Section 6.2, you shall
not be deemed to have an  interest  in any  corporation  whose stock is publicly
traded merely because you are the owner of not more than two percent (2%) of the
outstanding shares of any class of stock of such corporation,  provided you have
no active  participation in the business of such corporation  (other than voting
your stock) and you do not provide  services to such corporation in any capacity
(whether as an  employee,  an  independent  contractor  or  consultant,  a board
member, or otherwise).

6.3      Equitable Relief

         By your acceptance of your Severance Payment under this Agreement,  you
shall be deemed to have acknowledged that violation of Sections 6.1 or 6.2 would
cause the Company  irreparable damage for which the Company cannot be reasonably
compensated  in damages in an action at law, and that  therefore in the event of
any breach by you of Sections 6.1 or 6.2, the Company  shall be entitled to make
application to a court of competent  jurisdiction for equitable relief by way of
injunction or otherwise  (without being required to post a bond). This provision
shall not,  however,  be  construed  as a waiver of any of the rights  which the
Company may have for damages under this Agreement or otherwise,  and,  except as
limited in Article  VII,  all of the  Company's  rights  and  remedies  shall be
unrestricted.


10.9-10

                                       11
<PAGE>


                                                                 EXHIBIT  10.9
                                                    ARTICLE VII
                                                    ARBITRATION

         Except for equitable relief as provided in Section 6.3,  arbitration in
accordance  with the then  most  applicable  rules of the  American  Arbitration
Association  shall  be  the  exclusive  remedy  for  resolving  any  dispute  or
controversy  between you and the Company or any of its Subsidiaries,  including,
but not limited to, any dispute  regarding your employment or the termination of
your  employment or any dispute  regarding the  application,  interpretation  or
validity of this Agreement not otherwise  resolved  through the claims procedure
set forth in Section 8.10. The arbitrator  shall be empowered to grant only such
relief as would be  available  in a court of law.  In the event of any  conflict
between this  Agreement and the rules of the American  Arbitration  Association,
the  provisions of this  Agreement  shall be  determinative.  If the parties are
unable to agree upon an arbitrator, they shall select a single arbitrator from a
list  designated by the office of the American  Arbitration  Association  having
responsibility  for the city in which you primarily  performed  services for the
Company or its Subsidiaries immediately before your termination of employment of
seven arbitrators, all of whom shall be retired judges who are actively involved
in hearing private cases or members of the National Academy of Arbitrators,  and
who, in either event, are residents of the area in which you primarily performed
services for the Company or its Subsidiaries immediately before your termination
of employment.  If the parties are unable to agree upon an arbitrator  from such
list, they shall each strike names  alternatively  from the list, with the first
to strike being determined by lot. After each party has used three strikes,  the
remaining name on the list shall be the arbitrator. The fees and expenses of the
arbitrator shall initially be borne equally by the parties;  provided,  however,
that each party shall  initially be responsible for the fees and expenses of its
own  representatives  and witnesses.  Unless  mutually  agreed  otherwise by the
parties,  any  arbitration  shall be conducted  at a location  within fifty (50)
miles  from the  location  in which you  primarily  performed  services  for the
Company  or any of its  Subsidiaries  immediately  before  your  termination  of
employment. If the parties cannot agree upon a location for the arbitration, the
arbitrator  shall  determine  the  location  within such fifty (50) mile radius.
Judgment  may be  entered  on the award of the  arbitrator  in any court  having
jurisdiction.  The prevailing party in the arbitration proceeding, as determined
by the arbitrator,  and in any enforcement or other court proceedings,  shall be
entitled to the extent provided by law to reimbursement from the other party for
all  of  the  prevailing  party's  costs  (including  but  not  limited  to  the
arbitrator's compensation), expenses and reasonable attorney's fees.

                                                   ARTICLE VIII
                                                   MISCELLANEOUS

8.1      Applicable Law

To the extent not preempted by the laws of the United States, the laws of the 
State of






10.9-11


                                       12
<PAGE>


                                                                   EXHIBIT  10.9

California  shall  be the  controlling  law  in all  matters  relating  to  this
Agreement,  regardless of the choice-of-law  rules of the State of California or
any other jurisdiction.

8.2      Construction

         No term or  provision  of this  Agreement  shall be  construed so as to
require the  commission  of any act contrary to law,  and wherever  there is any
conflict  between  any  provision  of this  Agreement  and any present or future
statute,  law, ordinance,  or regulation,  the latter shall prevail, but in such
event the affected  provision of this  Agreement  shall be curtailed and limited
only to the extent  necessary to bring such provision within the requirements of
the law.

8.3      Severability

         If a provision of this Agreement shall be held illegal or invalid,  the
illegality or invalidity  shall not affect the remaining parts of this Agreement
and this Agreement  shall be construed and enforced as if the illegal or invalid
provision had not been included.

8.4      Headings

         The Section headings in this Agreement are inserted only as a matter of
convenience,  and in no way define,  limit,  or extend or interpret the scope of
this Agreement or of any particular Section.


8.5      Assignability

         Your rights or interests  under this Agreement  shall not be assignable
or transferrable (whether by pledge, grant of a security interest, or otherwise)
by you, your  beneficiaries or legal  representatives,  except by will or by the
laws of descent and distribution.

8.6      Term

         If no Change in Control has theretofore occurred,  this Agreement shall
expire and be of no further force and effect on December 31, 1999; provided that
the Board may, at any time prior to the  expiration  hereof,  extend the term of
this Agreement. If a Change in Control occurs on or before December 31, 1999 (or
before the expiration of the extended term if the Board had extended the term of
this  Agreement),  this Agreement  shall continue in full force and effect until
its terms and provisions are completely carried out.

8.7      Amendment

         Except as set forth in Section 8.6, no provision of this  Agreement may
be modified, waived or discharged unless such waiver,  modification or discharge
is agreed to in  writing  and  signed by you and the  Company.  No waiver by the
Company  or you at any time or any breach by the other  party of, or  compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or any prior or subsequent  time.  No agreement or  representations,
written
10.9-12


                                       13
<PAGE>


                                                                   EXHIBIT  10.9
or oral,  express or implied,  with respect to the subject matter  hereof,  have
been made by either party which are not expressly set forth in this Agreement.

8.8      Notices

         For purposes of this  Agreement,  notices and all other  communications
provided  for herein  shall be in writing  and shall be deemed to have been duly
given when personally delivered,  telecopied,  or sent by certified or overnight
mail,  return receipt  requested,  postage prepaid,  addressed to the respective
addresses,  or sent to the  respective  telecopier  numbers,  last given by each
party to the other,  provided  that all notices to the Company shall be directed
to the attention of the Board of Directors  with a copy to the General  Counsel.
All notices and communications shall be deemed to have been received on the date
of  delivery  thereof if  personally  delivered,  upon  return  confirmation  if
telecopied,  on the third business day after the mailing thereof, or on the date
after sending by overnight  mail,  except that notice of change of address shall
be effective  only upon actual  receipt.  No objection to the method of delivery
may be made if the written notice or other communication is actually received.

8.9      Administration

         This Agreement is part of the Argonaut,  Inc. Employee  Retention Plan,
which is a welfare benefit plan within the meaning of Section 3(1) of ERISA. The
Administrator  of such Plan,  within the meaning of Section 3(16) of ERISA,  and
the Named Fiduciary thereof,  within the meaning of Section 402 of ERISA, is the
Company.  Attached  hereto as Exhibit  "B" is a statement  of your rights  under
ERISA.

8.10     Claims

         If you believe you are entitled to a benefit under this Agreement,  you
may make a claim for such benefit by filing with the Company a written statement
setting  forth the amount and type of payment so claimed.  The  statement  shall
also set forth the facts supporting the claim. The claim may be filed by mailing
or delivering it to the Secretary of the Company.

         Within  sixty (60)  calendar  days after  receipt of such a claim,  the
Company  shall  notify  you in  writing  of its action on such claim and if such
claim is not allowed in full,  shall state the following in a manner  calculated
to be understood by you:
  
       (a) The specific reason or reasons for the denial;
       (b) Specific reference to pertinent provisions of this Agreement on which
         the denial is based;

       (c) A description of any additional material or information necessary for
     you to be entitled to the benefits that have been denied and an 
     explanation of why such material or information is necessary; and

        (d) An  explanation  of this  Agreement's  claim review procedure.
10.9-13

                                       14
<PAGE>


                                                                  EXHIBIT  10.9
         If you disagree with the action taken by the Company,  you or your duly
authorized  representative may apply to the Company for a review of such action.
Such  application  shall be made within one hundred  twenty (120)  calendar days
after  receipt by you of the notice of the Company's  action on your claim.  The
application  for  review  shall be filed in the same  manner  as the  claim  for
benefits.  In  connection  with such  review,  you may inspect any  documents or
records pertinent to the matter and may submit issues and comments in writing to
the Company. A decision by the Company shall be communicated to you within sixty
(60)  calendar  days after  receipt of the  application.  The decision on review
shall be in writing and shall include specific reasons for the decision, written
in a manner  calculated to be understood by you, and specific  references to the
pertinent provisions of this Agreement on which the decision is based.

8.11     Notice of Termination

         Following  the  Effective  Time,  any  purported  termination  of  your
employment by the Company or any of its Subsidiaries  shall be communicated by a
written  notice of  termination,  which such notice shall  indicate the specific
termination provision in this Agreement, if any, relied upon and which shall set
forth in  reasonable  detail  the facts and  circumstances  claimed to provide a
basis for termination of your employment under any provision so indicated.

         If this  Agreement is acceptable to you,  please sign the enclosed copy
of this Agreement in the space provided below and return it to me.

                                                              Sincerely,

                                                            ARGONAUT GROUP, INC.



                                                       By: _____________________
                                                          Charles E. Rinsch,
                                                            President and CEO

ACCEPTED AND AGREED TO:


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10.9-14