Exhibit 10.2


 


ZENITH NATIONAL INSURANCE CORP. 2004
RESTRICTED STOCK PLAN


 


(As Amended and Restated May 24, 2006)


 


Section 1.              General Purpose of Plan; Definitions.


 


This plan is the Zenith National Insurance Corp. 2004 Restricted Stock
Plan (the “Plan”). The purpose of the Plan is to enable the Company (as
defined below) to attract and retain highly qualified personnel who will
contribute to the Company’s success and to provide incentives to Participants
(as defined below) that are linked directly to increases in stockholder value
and will therefore inure to the benefit of all stockholders of the Company.


 


For purposes of the Plan, the following terms shall be defined as set
forth below:


 


(a)           “Administrator”
means the Board or the Committee, as appointed by the Board in accordance with
Section 2 below.


 


(b)           “Beneficial Owner”
shall have the meaning set forth in Rule 13d-3 under the Exchange Act.


 


(c)           “Board” means
the board of directors of the Company.


 


(d)           “Change in Control”
means, following the Effective Date, one of the following events:


 


(1)           any Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company representing 50% or more
of the combined voting power of the Company’s then outstanding securities,
excluding any Person who becomes such a Beneficial Owner in connection with a
transaction described in subclause (x) of clause (3) below; or


 


(2)           the following individuals cease for any reason to
constitute a majority of the number of directors then serving on the
Board:  (i) directors who, on the date
hereof, constitute the Board and any (ii) new director (other than a director
whose initial assumption of office is in connection with an actual or
threatened election contest, including but not limited to a consent solicitation,
relating to the election of directors of the Company) whose appointment or
election by the Board or nomination for election by the Company’s stockholders
was approved or recommended by a vote of a majority of the directors then still
in office who either were directors on the date hereof or whose appointment,
election or nomination for election was previously so approved or recommended;
or


 


(3)           there is consummated a merger or consolidation of the
Company with any other corporation, other than (x) a merger or consolidation
which


 

















 


would
result in the voting securities of the Company outstanding immediately prior to
such merger or consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity or any parent thereof), in combination with the ownership of any trustee
or other fiduciary holding securities under an employee benefit plan of the
Company or any subsidiary of the Company, at least 50% of the combined voting
power of the securities of the Company or such surviving entity or any parent
thereof outstanding immediately after such merger or consolidation, or (y) a
merger or consolidation effected to implement a recapitalization or
reincorporation of the Company (or similar transaction) in which no Person is
or becomes the Beneficial Owner, directly or indirectly, of securities of the
Company representing 50% or more of the combined voting power of the Company’s
then outstanding securities; or


 


(4)           the stockholders of the Company approve a plan of
complete liquidation or dissolution of the Company or there is consummated the
sale or disposition by the Company of all or substantially all of the Company’s
assets, other than a sale or disposition by the Company of all or substantially
all of the Company’s assets to an entity, at least 50% of the combined voting
power of the voting securities of which is owned by substantially all of the
stockholders of the Company immediately prior to such sale in substantially the
same proportions as their ownership of the Company immediately prior to such
sale.


 


(e)           “Committee”
means the Compensation Committee of the Board. If at any time or to any extent
the Board does not administer the Plan, then the functions of the Board
specified in the Plan shall be exercised by the Committee.


 


(f)            “Company” means
Zenith National Insurance Corp., a Delaware corporation (or any successor
corporation).


 


(g)           “Disability”
means the inability of a Participant to substantially perform his or her duties
and responsibilities to the Company or to any Parent or Subsidiary by reason of
a physical or mental disability or infirmity (i) for a continuous period of six
(6) months, or (ii) at such earlier time as the Participant submits medical
evidence satisfactory to the Administrator that the Participant has a physical
or mental disability or infirmity that will likely prevent the Participant from
returning to the performance of the Participant’s work duties for six (6)
months or longer. The date of such Disability shall be the last day of such
six-month period or the day on which the Participant submits such satisfactory
medical evidence, as the case may be.


 


(h)           “Effective Date”
shall have the meaning set forth in Section 10.


 


(i)            “Eligible Recipient”
means an employee or director of the Company or of any Parent or Subsidiary.


 


(j)            “Exchange Act”
means the Securities Exchange Act of 1934, as amended from time to time.


 


(k)           “Fair Market Value”
means, as of any given date, with respect to any awards granted hereunder, (A)
the closing sale price of a share of Stock on such date


 

















 


on the principal securities
exchange on which the Company’s equity securities are listed or traded, (B) the
fair market value of a share of Stock as determined in accordance with a method
prescribed in the agreement evidencing any award hereunder, or (C) the fair
market value of a share of Stock as otherwise determined by the Administrator
in the good faith exercise of its discretion.


 


(l)            “Parent” means
any entity that is the Beneficial Owner of 50% or more of the combined voting
power of all classes of stock of the Company.


 


(m)          “Participant”
means any Eligible Recipient selected by the Administrator, pursuant to the
Administrator’s authority in Section 2 below, to receive awards of Restricted
Stock.


 


(n)           “Person” shall
have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and
used in Sections 13(d) and 14(d) thereof, except that such term shall not
include (i) the Company or any Parent or Subsidiary, (ii) a trustee or other
fiduciary holding securities under an employee benefit plan of the Company or
any of its affiliates, (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (iv) a corporation owned,
directly or indirectly, by substantially all of the stockholders of the Company
in substantially the same proportions as their ownership of stock of the
Company.


 


(o)           “Plan” shall
have the meaning set forth in the first paragraph of this Section 1.


 


(p)           “Restricted Period”
shall have the meaning set forth in Section 5(f)(i).


 


(q)           “Restricted Stock”
means shares of Stock subject to restrictions on sale, transfer, pledge or
assignment during a Restricted Period pursuant to Section 5.


 


(r)            “Restricted Stock
Award Agreement” shall have the meaning set forth in Section 5(d).


 


(s)           “Stock” means
the common stock, par value $1.00 per share, of the Company.


 


(t)            “Subsidiary”
means any entity with respect to which the Company is the Beneficial Owner
of  50% or more of the total combined
voting power of all classes of stock of such entity.


 


(u)           “Unrestricted Stock”
means Restricted Stock for which the Restricted Period has lapsed.


 


Section 2.              Administration.


 


The Plan shall be administered in accordance with the requirements of
Rule 16b-3, promulgated under the Exchange Act, by the Board or, at the Board’s
sole


 

















 


discretion, by the Committee,
which shall be appointed by the Board, and which shall serve at the discretion
of the Board.


 


The Administrator shall have the power and authority to grant awards of
Restricted Stock to Eligible Recipients pursuant to the terms of the Plan. Except
as otherwise provided herein, the Administrator shall have the authority:


 


(a)           to select those
Eligible Recipients who shall be Participants;


 


(b)           to determine whether
and to what extent awards of Restricted Stock are to be granted hereunder to
Participants;


 


(c)           to determine the number
of shares of Stock to be covered by each award granted hereunder and the
purchase price thereof; and


 


(d)           to determine the terms
and conditions, not inconsistent with the terms of the Plan, of each award
granted hereunder, including, but not limited to the restrictions applicable to
awards of Restricted Stock and the conditions under which restrictions
applicable to such awards of Restricted Stock shall lapse.


 


The Administrator shall have the authority, in its sole discretion, to
adopt, alter and repeal such administrative rules, guidelines and practices
governing the Plan as it shall from time to time deem advisable; to interpret
the terms and provisions of the Plan and any award issued under the Plan (and
any agreements relating thereto); and to otherwise supervise the administration
of the Plan.


 


All decisions made by the Administrator pursuant to the provisions of
the Plan shall be final, conclusive and binding on all persons, including the
Company and the Participants.


 


Section 3.              Stock Subject to Plan.


 


The total number of shares of Stock reserved and available for issuance
under the Plan shall be 625,000 shares. Such shares may consist, in whole or in
part, of authorized and unissued shares or treasury shares. To the extent that
any shares of Stock subject to any award of Restricted Stock granted hereunder
are forfeited, such shares of Stock shall again be available for issuance in
connection with future awards granted under the Plan.


 


In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend or other change in corporate structure
affecting the Stock, an equitable substitution or proportionate adjustment shall
be made in (i) the aggregate number of shares of Stock reserved for issuance
under the Plan, and (ii) the kind, number and purchase price of shares of Stock
subject to outstanding awards of Restricted Stock granted under the Plan, in
each case, as may be determined by the Administrator, in its sole discretion. Such
other substitutions or adjustments shall be made as may be determined by the
Administrator, in its sole discretion. In connection with any event


 

















 


described in this paragraph,
the Administrator may provide, in its sole discretion, for the cancellation of
any outstanding awards and payment in cash or other property therefor.


 


Section 4.              Eligibility.


 


Eligible Recipients shall be eligible to receive awards of Restricted
Stock. The Participants under the Plan shall be selected from time to time by
the Administrator, in its sole discretion, from among the Eligible Recipients,
and the Administrator shall determine, in its sole discretion, the number of
shares of Stock covered by each such award.


 


Section 5.              Restricted Stock.


 


(a)           General. Awards of Restricted Stock may be granted under the
Plan. The Administrator shall determine the Eligible Recipients to whom, and
the time or times at which, awards of Restricted Stock shall be made; the
number of shares to be awarded; the price to be paid by the Participant for the
acquisition of Restricted Stock; the Restricted Period (as defined in Section
5(f)) applicable to awards of Restricted Stock, including any applicable
performance objectives; and all other conditions of the awards of Restricted
Stock. The provisions of the awards of Restricted Stock need not be the same
with respect to each Participant.


 


(b)           Purchase Price. The Administrator shall determine the purchase price
to be paid for each share of Restricted Stock; provided, that such per
share purchase price shall not be less than par value.


 


(c)           Form of Payment. The purchase price for an award of Restricted Stock
may be paid in cash or its equivalent. The Administrator may in its discretion
allow payment in the form of (i) shares of unrestricted Stock owned by the
Eligible Recipient 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, (ii) cancellation of indebtedness, (iii) services rendered or (iv) any
combination of the foregoing.


 


(d)           Awards and Certificates. The prospective recipient of
awards of Restricted Stock shall not have any rights with respect to any such
award unless and until such recipient has executed an agreement evidencing the
award (a “Restricted Stock Award Agreement”) and has delivered a fully
executed copy thereof to the Company within a period of thirty (30) days (or
such other period as the Administrator may specify) after the award date.


 


(e)           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.


 


If the Company elects to issue stock certificates evidencing shares of
Restricted Stock, the Participant who is granted an award of Restricted Stock
shall be issued a stock certificate in respect of such shares of shares of
Restricted Stock. Such certificates shall be registered in the name of the
Participant and shall bear an appropriate


 

















 


legend referring to the terms,
conditions and restrictions applicable to any such award. The Company may
require that the stock certificates evidencing Restricted Stock granted
hereunder be held in escrow in the custody of the Company (or as otherwise
determined by the Administrator) until the restrictions thereon have lapsed,
and that, as a condition of any award of Restricted Stock, the Participant
shall have delivered to the Company a stock power, endorsed in blank, relating to
the Stock covered by such award. Promptly after the Restricted Period has
lapsed without forfeiture in respect of such shares of Restricted Stock except
as the Administrator, in its sole discretion, shall otherwise determine,
certificates for shares of Unrestricted Stock shall be delivered to the
Participant.


 


If the Company elects to reflect Restricted Stock ownership in
book-entry form, it shall establish on its books a Restricted Stock account in
the Participant’s name, and shall credit to such account the number of shares
of the Participant’s Restricted Stock. The book entry shares of Restricted
Stock shall be subject to the restrictions described in Section 5(f) until the
termination of the Restricted Period, whereupon the shares of Unrestricted Stock
shall promptly be transferred to the Participant in the form and registration
as indicated by the Participant.


 


(f)            Restrictions and Conditions. The awards of Restricted Stock
granted pursuant to this Section 5 shall be subject to the following restrictions
and conditions:


 


(i)            Subject to the provisions of the Plan and the
Restricted Stock Award Agreement governing any such award, during such period
as may be established by the Administrator commencing on the date of grant (the
“Restricted Period”), the Participant shall not be permitted to sell,
transfer, pledge or assign shares of Restricted Stock awarded under the Plan; provided,
however, that the Administrator may, in its sole discretion, provide for
the lapse of such restrictions in installments and may accelerate or waive such
restrictions in whole or in part based on such factors and such circumstances
as the Administrator may determine, in its sole discretion, including, but not
limited to, the attainment of certain performance related goals or the Participant’s
termination of employment or service as a director with the Company or any
Parent or Subsidiary; and provided further that the Administrator shall
not waive such Restricted Period established pursuant to the foregoing, except
in the case of death, disability or retirement of that Participant or the
occurrence of a Change in Control (except that a number of shares equal to ten
percent (10%) of the total shares of Restricted Stock that had been authorized
for award under the Plan are exempt from such waiver restriction). Subject to
the foregoing, the following shall apply to all awards of Restricted Stock:


 


(1)             with respect to awards of Restricted Stock granted to
employees, except with respect to the lapse of the Restricted Period upon
attainment of specified performance goals, the Restricted Period shall not
lapse earlier than (A) the second (2nd) anniversary of the date of
grant of an award of Restricted Stock with respect to 50% of the shares of
Stock subject to such award and (B) the


 

















 


fourth
(4th) anniversary of the date of grant with respect to the remaining
50% of the shares of Stock subject to such award;


 


(2)             with respect to awards of Restricted Stock granted to
directors (who are not also employees), except with respect to the lapse of the
Restricted Period upon attainment of specified performance goals, the
Restricted Period shall not lapse earlier than (A) the first (1st)
anniversary of the date of grant of such award with respect to one-third (1/3)
of the shares of Stock subject to such award, (B) the second (2nd)
anniversary of the date of grant of such award with respect to an additional
one-third (1/3) of the shares of Stock subject to such award and (C) the third
(3rd) anniversary of the date of grant of such award with respect to
the remaining one-third (1/3) of the shares of Stock subject to such award; and


 


(3)             the Restricted Period shall lapse in full upon the
death of the Participant or termination of the Participant’s employment or
service due to Disability.


 


(ii)           Except as otherwise provided in this Section 5, the
Participant shall generally have the rights of a stockholder of the Company
with respect to Restricted Stock during the Restricted Period. Unless otherwise
provided in a Restricted Stock Award Agreement, ordinary-course cash dividends
paid with respect to Restricted Stock shall be paid to the Participant and
extraordinary dividends (as determined by the Administrator) shall be held by
the Company, in escrow or as otherwise determined by the Administrator, until
the Restricted Period applicable to such Restricted Stock lapses. If the
Restricted Stock pursuant to which such extraordinary dividends were paid is
forfeited, such dividends shall also be forfeited and returned to the Company.


 


(iii)          The rights of Participants upon termination of
employment or service with the Company or any Parent or Subsidiary during the
Restricted Period applicable to such Participant’s Restricted Stock shall be
set forth in the Restricted Stock Award Agreement governing the award of such Restricted
Stock.


 


Section 6.              Change
in Control.


 


Upon a Change in Control, unless awards of Restricted Stock are assumed
by a successor corporation or equivalent awards are substituted therefor, all
awards of Restricted Stock shall become fully vested and free of restrictions.


 


Section 7.              Amendment and Termination.


 


The Board may amend, alter or discontinue the Plan, but no amendment,
alteration, or discontinuation shall be made that would impair the rights of a
Participant under any award theretofore granted without such Participant’s
consent, or that, without the approval of the stockholders (as described
below), would:


 

















 


(a)           except as provided in Section 3, increase the total
number of shares of Stock reserved for issuance under the Plan;


 


(b)           change the class of persons eligible to participate in
the Plan; or


 


(c)           modify the Plan to materially increase the benefits
accruing to Participants.


 


Notwithstanding the foregoing, stockholder approval under this Section
7 shall only be required at such time and under such circumstances as
stockholder approval would be required under stock exchange rules or other
applicable law or regulation with respect to amendment of the Plan.


 


The Administrator may amend the terms of any award theretofore granted,
prospectively or retroactively, but, subject to Section 3, no such amendment
shall impair the rights of any Participant without his or her consent.


 


Section 8.              Unfunded Status of Plan.


 


The Plan is intended to constitute an “unfunded” plan for incentive
compensation. With respect to any payments not yet made to a Participant by the
Company, nothing contained herein shall give any such Participant any rights
that are greater than those of a general creditor of the Company.


 


Section 9.              General Provisions.


 


(a)           Shares of Stock shall not be issued pursuant to any
award granted hereunder unless the issuance and delivery of such shares of
Stock pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act and the requirements of any stock exchange upon which the Stock
may then be listed.


 


(b)           The Administrator may require each person acquiring
shares of Stock hereunder to represent to and agree with the Company in writing
that such person is acquiring the shares of Stock without a view to
distribution thereof. The certificates for such shares of Stock may include any
legend which the Administrator deems appropriate to reflect any restrictions on
transfer.


 


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 is then 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.


 


(c)           Nothing contained in the Plan shall prevent the Board
from adopting other or additional compensation arrangements; and such
arrangements may be


 

















 


either
generally applicable or applicable only in specific cases. Neither the adoption
of the Plan nor the grant of an award hereunder shall confer upon any Eligible
Recipient any right to continued employment or service with the Company or any
Parent or Subsidiary, as the case may be, nor shall it interfere in any way
with the right of the Company or any Parent or Subsidiary to terminate the
employment or service of any of its Eligible Recipients at any time.


 


(d)           Each Participant shall, no later than the date as of
which the value of an award first becomes includible in the gross income of the
Participant for Federal income tax purposes, pay to the Company, or make
arrangements satisfactory to the Administrator regarding payment of, any
Federal, state, or local taxes of any kind required by law to be withheld with
respect to such award. The obligations of the Company under the Plan shall be
conditional on the making of such payments or arrangements, and the Company
shall, to the extent permitted by law, have the right to deduct any such taxes
from any payment of any kind otherwise due to the Participant.


 


(e)           No member of the Board or the Administrator, nor any
officer or employee of the Company acting on behalf of the Board or the
Administrator, shall be personally liable for any action, determination, or
interpretation taken or made in good faith with respect to the Plan, and all members
of the Board or the Administrator and each and any officer or employee of the
Company acting on their behalf shall, to the extent permitted by law, be fully
indemnified and protected by the Company in respect of any such action,
determination or interpretation.


 


Section 10.            Stockholder Approval; Effective Date of
Plan.


 


The Plan shall be effective as of the date the Plan is approved by
stockholders of the Company (the “Effective Date”). No grant of any
award hereunder shall be made prior to stockholder approval of the Plan.


 


Section 11.            Term of Plan.


 


No awards of Restricted Stock shall be granted pursuant to the Plan on
or after the tenth (10th) anniversary of the Effective Date, but
awards theretofore granted may extend beyond that date.