Exhibit 10.19


 


ZENITH NATIONAL INSURANCE CORP.


 


AMENDED AND RESTATED


 


2003 NON-EMPLOYEE DIRECTOR DEFERRED
COMPENSATION PLAN


 


Zenith National Insurance
Corp., a Delaware corporation (the “Company”),
hereby amends and restates the 2003 Non-Employee Director Deferred Compensation
Plan (the “Plan”), effective December 1,
2008, with reference to the following:


 


WHEREAS, the Company
maintains the Plan for the benefit of its non-employee directors; and


 


WHEREAS, the Plan provides
that the Board of Directors of the Company (the “Board”) may amend the Plan at
any time; and


 


WHEREAS, the Plan was
previously amended, such amendment effective December 2, 2004; and


 


WHEREAS, Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”), places certain
restrictions, among other things, as to the timing and distributions from
nonqualified deferred compensation plans and arrangements; and


 


WHEREAS, the Board desires
to amend and restate the Plan to comply with Section 409A of the Code.


 


NOW THEREFORE, the Plan is
hereby amended and restated in its entirety as follows:


 


ARTICLE
1.    DEFERRED COMPENSATION ACCOUNTS.


 


SECTION 1.1    ESTABLISHMENT
OF ACCOUNTS.    The Company shall
establish a “Deferred Cash Account”
and a “Stock Unit Account” (each,
an “Account,” and collectively, “Accounts”) for each Participant which
shall be utilized solely as a device to measure and determine the amount of
deferred Director’s Compensation to be paid under the Plan.


 


SECTION 1.2    PROPERTY
OF COMPANY.    Any amounts so set aside for
Benefits payable under the Plan are the property of the Company, except, and to
the extent, of any assignment of such assets to an irrevocable trust.


 


ARTICLE
2.    DEFINITIONS, GENDER, AND NUMBER.


 


SECTION 2.1    DEFINITIONS.    Whenever used in the Plan, the following
words and phrases shall have the meanings set forth below unless the context
plainly requires a different meaning, and when a defined meaning is intended,
the term is capitalized.


 


(a)   “Administrator”
means the Board, or if and to the extent the Board does not administer the
Plan, the Committee.


 


(b)   “Beneficiary”
or “Beneficiaries” means the
individuals, trusts or other entities designated by a Participant in writing
pursuant to Section 7.2(d) of the Plan as being entitled to receive any
benefit payable under the Plan by reason of the death of a Participant, or, in
the absence of such designation, the persons specified in Section 7.2(e) of
the Plan.


 

















 


(c)   “Benefit”
means the amounts credited to a Participant’s Accounts pursuant to such
Participant’s Deferred Compensation Agreement plus or minus the gains or losses
pursuant to Section 4.2.


 


(d)   “Board”
means the Board of Directors of the Company as constituted at the relevant
time.


 


(e)   “Closing
Price” means the closing price, or last reported sales price, as the
case may be of the Common Stock on the New York Stock Exchange, or the primary
national securities exchange on which the Common Stock is traded as of the
applicable date; provided, however, that if no closing price is available for
such date, “Closing Price” means the closing price or last reported sales
price, as the case may be, of the Common Stock as of the next most recent date
for which a price is available.


 


(f)    “Code”
means the Internal Revenue Code of 1986, as amended from time to time, and any
successor statute. References to a Code Section shall be deemed to be to
that section or to any successor to that section.


 


(g)   “Committee”
means the Compensation Committee of the Board.


 


(h)   “Common
Stock” means the common stock of the Company, par value $1.00 per
share, or any successor security.


 


(i)    “Company”
means Zenith National Insurance Corp., a Delaware corporation.


 


(j)    “Deferred
Compensation Agreement” means the agreement to participate and defer
compensation between a Participant and the Company.


 


(k)   “Deferred
Stock Unit” means a unit equal in value to one share of Common Stock
and posted to a Participant’s Stock Unit Account for the purpose of measuring
the Benefits payable under the Plan. The number of Deferred Stock Units in or
posted to a Participant’s Stock Unit Account shall be rounded to the nearest
one-hundredth. In the event that shares of Common Stock shall be changed into
or exchanged for a different number or kind of shares of stock or other
securities of the Company or another corporation (whether by reason of merger,
consolidation, recapitalization, split-up, combination of shares or otherwise),
or if the number of shares of Common Stock shall be increased through a stock
split or the payment of a stock dividend, then there shall be substituted for
or added to each Deferred Stock Unit the number and kind of shares of stock or
other securities into which each outstanding share of Common Stock shall be so
changed, or for which each such share shall be exchanged, or to which each such
share shall be entitled, as the case may be, in each case as determined by the
Administrator in its sole discretion.


 


(l)    “Director”
means an individual serving as a member of the Board.


 


(m)  “Director’s Compensation” of a Director for
any Plan Year means that individual’s total annual retainer, and any fees
received for performance of the Director’s functions, including fees for
attendance or participation at meetings and for serving on a Board Committee or
as a Committee or Board Chair. “Director’s Compensation” shall not include
expense reimbursements.


 


(n) “Disability” means the
Participant’s absence from service with the Company which: (i) was due to his
inability to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less
than twelve (12) months; or (ii) resulted from a medically determinable physical
or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than twelve (12) months,
and caused the Participant to receive income replacement benefits for a period
of not less than three (3) 


 

















 


months under
an accident and health plan covering the Company’s employees or directors or
(iii) qualifies as a disability under the Company’s Long Term Disability Plan.


 


(o)   “Early
Benefit Distribution Date” means a date specified by the Participant
and which is at least twenty-four (24) full calendar months after the date the
Participant’s Deferred Compensation Agreement is received by the Company.


 


(q)   “Enrollment
Period” means the period of December 1 to December 31
prior to the Plan Year to which a deferral election pursuant to a Deferred
Compensation Agreement applies. The Enrollment Period for any newly elected
Non-Employee Director shall be any time within thirty (30) days before or after
the Director takes office.


 


(r)   “Non-Employee
Director” means any Director who is not an employee of the Company
or any of its subsidiaries.


 


(s)   “Participant”
means a Non-Employee Director of the Company who has executed a Deferred
Compensation Agreement and who maintains an Account under the Plan.


 


(t)   “Plan”
means this Amended and Restated Zenith National Insurance Corp. 2003
Non-Employee Director Deferred Compensation Plan as set forth herein and as
amended or restated from time to time.


 


(u)    “Plan
Year” means January 1 through December 31.


 


(v)    “Separation from Service”
means the cessation of a Participant’s services as a Director of the Company,
whether voluntary or involuntary, for any reason including retirement,
Disability or death, where the Company and the Participant reasonably anticipate
that no further services of any kind would be performed following such
Separation from Service, or that the level of bona fide services the
Participant would perform after such Separation from Service (whether as a
Director or as an independent contractor) would permanently decrease to no more
than 20% of the average level of bona fide services performed (whether as a
Director or as an independent contractor) over the immediately preceding
36-month period (or, if shorter, the full period of services to the Company).


 


(x)                                   “Subsequent Deferral
Election” has the meaning as set forth in Section 3.2.


 


(y)   A “Termination Event”
shall be deemed to occur upon (i) the Participant’s Separation from
Service; (ii) the Participant’s Disability; (iii) the Participant’s
death; (iv) a time or a fixed schedule as specified under this Plan; (v) a
change in control event (as defined in Treasury Regulation §1.409A-3(i)(5)); or
(vi) the occurrence of an Unforeseeable Emergency.


 


(z)    “Unforeseeable Emergency’’
means severe financial hardship to the Participant resulting from an illness or
accident of the Participant, the Participant’s spouse, beneficiary, or a
dependent of the Participant, loss of the Participant’s property due to
casualty (including the need to rebuild a home following damage to a home not
otherwise covered by insurance, for example, not as a result of a natural
disaster), or other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the Participant.


 


SECTION 2.2.    GENDER
AND NUMBER.    Except as otherwise
indicated by context, masculine terminology used herein also includes the
feminine and neuter, and terms used in the singular may also include the
plural.


 

















 


ARTICLE
3.    PARTICIPATION.


 


SECTION 3.1    ELIGIBILITY
TO PARTICIPATE.    Each Non-Employee
Director of the Company may participate in this Plan.


 


SECTION 3.2    ELECTION
TO PARTICIPATE.    Each Non-Employee
Director may become a Participant in the Plan by electing to defer compensation
in accordance with the terms of this Plan during an Enrollment Period. An
election to defer shall be in writing and shall be made by executing a Deferred
Compensation Agreement. Except with respect to new Non-Employee Directors, all
elections to defer amounts under this Plan shall be made pursuant to a Deferred
Compensation Agreement executed and filed with the Company before the year in
which the amount deferred is earned.  A
deferral election made pursuant to a Deferred Compensation Agreement shall
remain in effect until modified by the Participant.  Notwithstanding the preceding sentence, a
Participant may modify his or her deferral election (a “Subsequent
Deferral Election”) provided that:


 


(i)                                     such Subsequent Deferral Election will not
take effect until at least twelve (12) months after the date on which the
Subsequent Deferral Election is made;


 


(ii)                                  the payment with respect to such Subsequent
Deferral Election is deferred for a period of not less than five (5) years from
the date such payment would otherwise have been paid (or, in the case of (1) a
life annuity or (2) installment payments treated as a single payment, five
(5)  years from the date the first amount was scheduled to be paid); and


 


(iii)                               any Subsequent Deferral Election related to a
payment to be made at a specified time or pursuant to a fixed schedule is made
not less than twelve (12) months before the date the payment is scheduled to be
paid (or, in the case of (1) a life annuity or (2) installment
payments treated as a single payment,                                                 twelve (12) months before the date the first
amount was scheduled to be paid).


 


SECTION 3.3    CESSATION
OF PARTICIPATION.    Participation in the
Plan shall continue until all of the Benefits to which the Participant is
entitled have been paid in full.


 


ARTICLE 4.    ENTRIES TO PARTICIPANTS’ ACCOUNTS.


 


SECTION 4.1    DEFERRALS.    Pursuant to a Deferred Compensation
Agreement in effect for the applicable Plan Year, a Participant may elect to
defer all or a portion of Director’s Compensation into his or her Deferred Cash
Account, Stock Unit Account, or a combination thereof.


 


(a)    Deferred
Cash Account.    A Participant’s
Deferred Cash Account shall be credited with the dollar amount of Director’s
Compensation to be deferred as designated by such Participant in his or her
Deferred Compensation Agreement on the date such compensation would otherwise
have been payable.


 


(b)    Stock Unit
Account.    A Participant’s
Stock Unit Account shall be credited with a number of Deferred Stock Units
determined by dividing (i) the amount of Director’s Compensation to be
deferred as designated by such Participant in his or her Deferred Compensation
Agreement on the date such compensation would otherwise have been payable, by (ii) the
Closing Price of the Common Stock on the last trading day prior to the date the
Deferred Stock Units are credited.


 

















 


SECTION 4.2    CREDITS
TO ACCOUNTS.


 


(a)    Deferred
Cash Account.    At the end of
each calendar quarter, a Participant’s Deferred Cash Account shall be credited
by an amount equal to deemed interest, at the prime rate of interest, as
reported in the Wall Street Journal on the last day of such calendar quarter
(or if not reported on such day, the latest reported rate preceding the last
day of the calendar quarter), upon the average daily balance of such
Participant’s Deferred Cash Account during such calendar quarter.


 


(b)    Stock Unit
Account.    The Participant’s
Stock Unit Account shall be valued as if his or her Stock Unit Account were
invested in shares of Common Stock equal to the number of Deferred Stock Units
posted to his or her Stock Unit Account. The value of a Participant’s Stock
Unit Account shall vary with the value of the Common Stock. In addition, a
Participant’s Stock Unit Account shall be credited, as of the applicable
dividend payment date, with additional Deferred Stock Units determined by
dividing (i) the per share dividend declared on the Common Stock
multiplied by the number of Deferred Stock Units posted to the Participant’s
Stock Unit Account as of the record date with respect to the declaration of
such dividend, by (ii) the Closing Price of the Common Stock on the last
trading day prior to the applicable dividend payment date. As of any date of
valuation, the value of a Participant’s Stock Unit Account will be equal to the
value (at the Closing Price on such date) of the number of shares of Common
Stock represented by the Deferred Stock Units credited to the Stock Unit
Account as of that date.


 


SECTION 4.3    DISTRIBUTIONS.


 


(a)    Deferred
Cash Account.    A Participant’s
Deferred Cash Account shall be debited for the amount of any distribution from
such Account.


 


(b)    Stock Unit
Account.    A Participant’s
Stock Unit Account shall be debited for the amount of any distribution from
such Account by dividing: (i) the dollar amount of the distribution by (ii) the
Closing Price of the Common Stock on the last trading day prior to the date the
Stock Unit Account is debited.


 


ARTICLE
5.    BENEFITS.


 


SECTION 5.1    TIMING
OF DISTRIBUTION.    The amounts credited
to a Participant’s Accounts shall be paid (or payment shall commence) as soon
as reasonably practicable after the earlier of: (i) the Early Benefit
Distribution Date, if the Participant has made a valid election for early
distribution of Benefits pursuant to Section 5.2, (ii) a Termination
Event, or (iii) A Subsequent Deferral Election.


 


SECTION 5.2       EARLY
BENEFIT DISTRIBUTION DATE.    A
Participant may elect an Early Benefit Distribution Date. Such election shall
be made in the Participant’s original Deferred Compensation Agreement and shall
specify the portion or amount of the Participant’s Accounts to be distributed
on such Early Benefit Distribution Date. Subject to Section 3.2, any
election of an Early Benefit Distribution Date shall be irrevocable, both as to
the date of distribution and as to the amount of the distribution.


 


(a)   No election of an Early Benefit Distribution
Date shall be given effect unless such election specifying an Early Benefit
Distribution Date is received by the Company. With respect to elections
relating to Plan Years subsequent to the Plan Year to which the original
election relates, the Company will be deemed to have received the election on December 31
of the prior year.


 


(b)   If a Participant elects an Early Benefit
Distribution Date or a Subsequent Deferral Election for less than 100% of each
of his or her Accounts (determined as of the Early Benefit 


 

















 


Distribution Date or
Subsequent Deferral Election, as applicable), the balance of such Participant’s
Account remaining after the Early Benefit Distribution Date or Subsequent
Deferral Election (adjusted as provided in Article 4) shall be distributed
in accordance with Section 5.1 without regard to Section 5.1(i) or
5.1(iii).


 


(c)   If a Participant has a Termination Event prior
to his or her Early Benefit Distribution Date or Subsequent Deferral Election,
his or her election of an Early Benefit Distribution Date or Subsequent
Deferral Election shall not be given effect and distribution of the Participant’s
Accounts shall be made in accordance with Section 5.1 without regard to Section 5.1(i) or
5.1(iii).


 


ARTICLE
6.    VESTING.


 


SECTION 6.1    IMMEDIATE
VESTING.    Participants shall be fully
vested in all Accounts at all times.


 


ARTICLE
7.    DISTRIBUTION OF BENEFITS.


 


SECTION 7.1    FORM OF
BENEFIT.    Participants may elect in
their Deferred Compensation Agreements one of the following forms of cash
payment of Benefits:


 


(a)   annual installment payments over a five (5) year
or a ten (10) year period; or


 


(b)   a lump sum distribution.


 


Installment
payments shall be available to a Participant only in the event the Participant
elects to receive a distribution on a Termination Event. In the event a
Participant has failed to elect a form of distribution, or if no record of such
election can be found, the Participant shall receive annual payments over a
five (5) year period (except for payments made on an Early Benefit
Distribution Date or a Subsequent Deferral Election, which shall be paid in a
cash lump sum only). Except for lump sum distributions, Benefit payments shall
be a level annual amount for each calendar year, calculated using the sum of
the balances in the Participant’s Accounts at the beginning of the calendar
year (or, in the case of the first calendar year, on the date of the
Termination Event) and dividing it by the total number of annual payments
remaining in the entire payment period. The Benefit payment amount shall be
adjusted at the beginning of each calendar year. A Participant’s Account shall
continue to be credited during the payment period with gains and losses as
provided in Section 4.2.


 


SECTION 7.2    DEATH
BENEFITS.


 


(a)   If a Participant dies after commencement of
payment of Benefits, the remaining benefit payments, if any, shall be paid to
the Participant’s Beneficiary in a lump sum as soon as reasonably practicable
time following the Participant’s death.


 


(b)   If a Participant dies prior to the time
payment of Benefits commence, the Participant’s Benefit shall be paid to the
Beneficiary in a lump sum as soon as reasonably practicable time following the
Participant’s death.


 


(c)   Any Benefits that become payable under this Article 7
to the surviving spouse of a Participant shall be paid in a manner that will
qualify such Benefits for a marital deduction in the estate of a deceased
Participant under the terms of Section 2056 of the Code, and unless
specifically directed by a Participant to the contrary pursuant to an effective
beneficiary designation, any portion of a Participant’s Benefit payable to a surviving
spouse that remains unpaid at the death of such spouse shall be paid to the
spouse’s estate.


 

















 


(d)   Each Participant has the right to designate
primary and contingent Beneficiaries for Benefits payable under the Plan. A
beneficiary designation by a Participant shall be in writing on a form
acceptable to the Company and shall only be effective upon delivery to the
Company. A beneficiary designation may be revoked by a Participant at any time
by delivering to the Company either written notice of revocation or a new
beneficiary designation form. The beneficiary designation form last delivered
to the Company prior to the death of a Participant shall control.


 


(e)   In the event there is no beneficiary
designation on file with the Company, or all Beneficiaries designated by a
Participant have predeceased the Participant, the Benefits payable by reason of
the death of the Participant shall be paid to the Participant’s spouse, if
living; if the Participant does not leave a surviving spouse, to the Participant’s
issue by right of representation; or, if there are no such issue then living,
to the Participant’s estate. In the event there are Benefits remaining unpaid
at the death of a sole Beneficiary and no successor Beneficiary has been
designated, either by the Participant or the Participant’s spouse pursuant to Section 7.2(d),
the remaining balance of such benefit shall be paid to the deceased Beneficiary’s
estate; or, if the deceased Beneficiary is one of multiple concurrent
Beneficiaries, such remaining Benefits shall be paid proportionally to the
surviving Beneficiaries.


 


ARTICLE
8.    FUNDING.


 


SECTION 8.1    SOURCES
OF BENEFITS.    All Benefits under the
Plan shall be paid when due by the Company out of its assets or from an
irrevocable trust established by the Company for that purpose.


 


SECTION 8.2    NO
CLAIM ON SPECIFIC ASSETS.    No
Participant shall be deemed to have, by virtue of being a Participant in the
Plan, any claim on any specific assets of the Company or its subsidiaries such
that the Participant would be subject to income taxation on his or her Benefits
under the Plan prior to distribution and the rights of Participants and
Beneficiaries to Benefits to which they are otherwise entitled under the Plan
shall be those of an unsecured general creditor of the Company.


 


ARTICLE
9.    ADMINISTRATION OF THE PLAN.


 


SECTION 9.1    ADMINISTRATOR.    The Administrator shall be responsible for
the general operation and administration of this Plan and for carrying out the
provisions thereof.


 


SECTION 9.2    GENERAL
POWERS OF ADMINISTRATION.    The Plan
shall be administered by the Administrator. The Administrator shall be entitled
to rely conclusively upon all tables, valuations, certificates, opinions and
reports furnished by any actuary, accountant, controller, counsel or other
person employed or engaged by the Company with respect to this Plan.


 


SECTION 9.3    CLAIMS
PROCEDURE.    The Administrator shall
notify a Participant in writing within ninety (90) days of the Participant’s
written application for Benefits of his or her eligibility or non-eligibility
for Benefits under the Plan. If the Administrator determines that a Participant
is not eligible for Benefits or full Benefits, the notice shall set forth (i) the
specific reasons for such denial, (ii) a specific reference to the
provision of the Plan on which the denial is based, (iii) a description of
any additional information or material necessary for the claimant to perfect
his or her claim, a description of why it is needed, and an explanation of the
Plan’s claims review procedure and other appropriate information as the steps
to be taken if the Participant wishes to have his or her claim reviewed. If the
Administrator determines that there are special circumstances requiring
additional time to make a decision, the Administrator shall notify the
Participant of the special circumstances and the date by which a decision is
expected to be made, and may extend the time for an additional 90-day period.
If a Participant is determined by the Administrator to be not eligible for
Benefits, or if the Participant believes that he or she is entitled to greater
or different Benefits, the Participant shall have the opportunity to have his
or her claim 


 

















 


reviewed by the
Administrator by filing a petition for review with the Administrator within
sixty (60) days after receipt by  the
Participant of the notice issued by the Administrator. Said petition shall
state the specific reasons the Participant believes he or she is entitled to
Benefits or greater or different Benefits. Within sixty (60) days after receipt
by the Administrator of said petition, the Administrator shall afford the
Participant (and his or her counsel, if any) an opportunity to present the
Participant’s position to the Administrator orally or in writing, and said
Participant (or his or her counsel) shall have the right to review the
pertinent documents, and the Administrator shall notify the Participant of its
decision in writing within said sixty (60) day period, stating specifically the
basis of said decision written in a manner calculated to be understood by the
Participant and the specific provisions of the Plan on which the decision is
based. If, because of the need for a hearing, the sixty (60) day period is not
sufficient, the decision may be deferred for up to another sixty (60) day
period at the election of the Administrator, but notice of this deferral shall
be given to the Participant.


 


ARTICLE
10.    MISCELLANEOUS.


 


SECTION 10.1    BENEFITS
INALIENABLE.    Except as provided in Section 7.2,
the right of any Participant, any Beneficiary, or any other person to the
payment of any Benefits under this Plan shall not be assigned, transferred,
pledged or encumbered.


 


SECTION 10.2    SUCCESSORS
AND ASSIGNS.    This Plan shall be
binding upon and inure to the benefit of the Company, its successors and
assigns and the Participant and his or her heirs, executors, administrators and
legal representatives.


 


SECTION 10.3    COSTS
OF ENFORCEMENT.    If the Company, the
Participant, any Beneficiary, or a successor in interest to any of the
foregoing, brings legal action to enforce any of the provisions of this Plan,
the prevailing party in such legal action shall be reimbursed by the other
party for the prevailing party’s costs of such legal action including, without
limitation, reasonable fees of attorneys, accountants and similar advisors and
expert witnesses.


 


SECTION 10.4    DISPUTES.    Any dispute or claim relating to or arising
out of this Plan that cannot be resolved pursuant to the internal dispute resolution
processes implemented by the Administrator with respect to the Plan shall be
resolved in the following manner. The Participant or Beneficiary, as the case
may be, on the one hand, and the Administrator or its representative, on the
other hand (collectively, the “Parties”),
shall meet to attempt to resolve such disputes. If the disputes cannot be
resolved by the Parties, either Party may make a written demand for formal
dispute resolution and specify therein the scope of the dispute. Within thirty
(30) days after such written notification, the parties agree to meet for one
day with an impartial mediator and consider dispute resolution alternatives
other than litigation. If an alternative method of dispute resolution is not
agreed upon within thirty (30) days after the one day mediation, either party
may begin litigation proceedings.


 


SECTION 10.5    DOMESTIC
RELATIONS ORDER.   The time or schedule
of a payment under this Plan to an individual other than the Participant may be
accelerated, or a payment under this Plan may be made to an individual other
than the Participant, to the extent necessary to fulfill a domestic relations
order (as defined in Code Section 414(p)(1)(B)).


 


SECTION 10.6    GOVERNING
LAW.    This Plan shall be construed in
accordance with and governed by the laws of the State of Delaware, without
reference to the principles of conflicts of law thereof, to the extent such
construction is not pre-empted by any applicable federal law.


 


SECTION 10.7    ENTIRE
AGREEMENT.    This Plan constitutes the
entire understanding and agreement with respect to the subject matter contained
herein, and there are no agreements, understandings, restrictions,
representations or warranties among any Participant and the Company other than
those set forth or provided for herein.


 

















 


SECTION 10.8    AMENDMENT
AND TERMINATION.


 


(a)   This Plan may be amended by the Board at any
time in its sole discretion; provided, however, any amendment that would alter
the irrevocable nature of an election or which would reduce the amount credited
to a Participant’s Account on the date of such amendment shall not be effective
unless consented to in writing by the Participant or, if the Participant has
died or is incompetent, the Participant’s Beneficiary or conservator.


 


(b) 
Subject to the foregoing paragraph, the Board may liquidate or terminate the
Plan in its entirety at any time; however, if such liquidation or termination
shall result in the acceleration of payment under the Plan, such liquidation or
termination shall occur:


 


(1)                                  within twelve (12) months of a corporate
dissolution taxed under Section 331 of the Code, or with the approval of a
bankruptcy court pursuant to 11 U.S.C. §503(b)(1)(A), provided that the amounts
deferred under the Plan are included in the Participants’ gross incomes in the
later of the following years (or, if earlier, the taxable year in which the
amount is actually or constructively received):


 


(i)                                     the calendar year in which the Plan
termination and liquidation occurs;


 


(ii)                                  the first calendar year in which the amount
is no longer subject to a substantial risk of forfeiture; or


 


(iii)                               the first calendar year in which the payment is administratively
practicable;


 


(2)                                  pursuant to irrevocable action by the Company
within the thirty (30) days preceding or the twelve (12) months following a
change in control event (as defined in Treasury Regulation §1.409A-3(i)(5));
provided, however, that all agreements, methods, programs, and other
arrangements sponsored by the Company immediately after the time of the change
in control event that can be aggregated with the Plan pursuant to Treasury
Regulation §1.409A-1(c)(2)(i) are terminated with respect to each
Participant that experienced the change in control event, so that under the
terms of the termination and liquidation all such participants are required to
receive all amounts of compensation deferred under the termination agreements,
methods, programs, and other arrangements within twelve (12) months of the date
the Company irrevocably takes all necessary action to terminate and liquidate
the agreements, methods, programs, and other arrangements; or


 


(3)                                  at any time, provided that:


 


(i)                                     the termination does not occur proximate to a
downturn in the financial health of the Company;


 


(ii)                                  the Company terminates and liquidates all
agreements, methods, programs, and other arrangements that would be aggregated
with the Plan pursuant to Treasury Regulation §1.409A-1(c);


 


(iii)                               all payments in liquidation of the Plan are made after twelve (12)
months but before twenty-four (24) months of the date the Company takes all
necessary action to irrevocably terminate and 


 

















 


liquidate
the Plan other than payments that would be payable under the terms of the Plan
if the action to terminate and liquidate the Plan had not occurred (the “Plan
Termination Date”); and


 


(iv)                              the Company does not adopt a new plan that would be aggregated with any
terminated and liquidated plan under Treasury Regulation §1.409A-1(c) at
any time within three (3) years following the Plan Termination Date.


 


SECTION 10.9   SECTION 409A.    It is intended that this Plan shall comply
with the provisions of Section 409A of the Code so as not to subject any
Participant to the payment of additional taxes and interest under Section 409A
of the Code.  In furtherance of this
intent, this Plan shall be interpreted, operated, and administered in a manner
consistent with these intentions, and to the extent that any rules, regulations
or other guidance issued under Section 409A of the Code would result in
any Participant being subject to payment of additional income taxes or interest
under Section 409A of the Code, the Company shall amend this Plan to the
extent necessary to avoid the application of such taxes or interest to the
extent permitted by Section 409A of the Code.


 


ARTICLE 11.    TERM OF PLAN.


 


The
Plan shall remain in effect until terminated by the Board.


 


Executed as of this 1st day of December 2008.


 


 


	
   

  	
  ZENITH NATIONAL INSURANCE CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/ Kari L. Van Gundy

  	
   

  
	
   

  	
  By:

  	
  Kari L. Van Gundy

  
	
   

  	
   

  	
  Senior Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Michael E. Jansen

  	
   

  
	
   

  	
  By:

  	
  Michael E. Jansen

  
	
   

  	
   

  	
  Executive Vice President and General Counsel