EXHIBIT 10.2


 


EXECUTION COPY


 


EMPLOYMENT AGREEMENT


 


THIS AMENDED AND RESTATED
EMPLOYMENT AGREEMENT (“Agreement”) between ZENITH NATIONAL INSURANCE CORP., a
Delaware corporation (hereinafter referred to as “Zenith”), and Michael E.
Jansen (hereinafter referred to as “Employee”) is hereby amended and restated
in its entirety effective on the last date of execution set forth below (the “Effective
Date”).


 


RECITALS


 


WHEREAS, Employee is
presently employed as Executive Vice President and General Counsel of Zenith
Insurance Company, a subsidiary of Zenith, pursuant to a written Employment
Agreement dated January 23, 2006, as previously modified, and is also
employed as Executive Vice President and General Counsel of Zenith and is an
officer of certain of its other subsidiaries (Zenith and all of its
subsidiaries collectively referred to hereinafter as “Employer”); and


 


WHEREAS, Zenith and Employee
deem it in their respective best interests to extend the term of the Employment
Agreement at the present time and modify certain other provisions thereof;


 


NOW, THEREFORE, it is agreed
as follows:


 


1.                                      Amended
and Restated Employment Agreement. 
The Agreement is hereby amended and restated in its entirety and the
term thereof is hereby extended as hereinafter provided.


 


2.                                      Engagement
and Duties.  During the Term
of Employment as defined in Paragraph 3 of this Agreement:


 


2.1  
Employer hereby employs Employee and
Employee does hereby agree to be employed by Employer as Executive Vice
President and General Counsel of Zenith and in such other capacities at Zenith
and at each of the corporations which comprise Employer as shall hereafter be
agreed upon by Employee and the Chief Executive Officer of Zenith (“CEO”) or
the Board of Directors of Zenith (“Board”) and the boards of directors of such
other corporations.


 


2.2  
During the Term of Employment, Employee shall
report to the CEO or his designee. 
Employee shall perform the normal duties of such offices and such other
executive duties as may from time to time be assigned to him by and in
accordance with instructions and directions of the CEO, his designee or the
Board.  Both Employee and Employer hereby
expressly recognize that the services described herein shall be performed to
the reasonable satisfaction of the CEO, his designee and the Board.


 

















 


2.3  
Employee shall perform the duties
contemplated hereunder at his principal office located in Los Angeles County,
California; provided, however, Employee shall travel outside Los Angeles County
to the extent he reasonably deems it necessary or appropriate in the
performance of his duties hereunder.


 


2.4  
Employee, during the Term of
Employment, shall devote his time, attention, energies, skills and best efforts
to the performance of his duties for and on behalf of Employer.


 


3.                                      Term
of Employment.  The term of
employment hereunder shall be a period commencing on the Effective Date and
terminating December 31, 2012 (“Expiration Date”), unless sooner
terminated as elsewhere provided herein (“Term of Employment”).


 


4.                                      Compensation.  As full and complete
consideration for the performance of his duties and the rendition of any and
all services under this Agreement, Employee shall be compensated as follows:


 


4.1  
Employee shall be paid $500,000 per
year, subject to such increases as the Compensation Committee of the Board (“Compensation
Committee”) may from time to time determine (“Base Compensation”).


 


4.2  
In addition to the Base
Compensation, Employee shall be eligible for such bonuses under Zenith’s
Executive Officer Bonus Plan as may be awarded by the Compensation Committee
pursuant to the plan, and may also be awarded discretionary bonuses by the
Compensation Committee.


 


4.3  
All compensation hereunder shall be
paid by Employer, as may be allocated by Employer from time to time among the
different corporations which comprise Employer, and shall comply with all
relevant governmental directives, rules and regulations which may be in
effect from time to time.  All Base
Compensation shall be payable ratably twice each month, or more or less often
in accordance with the normal payroll practices of Employer.


 


5.                                      Business
Expenses.  Employee shall
be reimbursed for reasonable and necessary expenses duly incurred in connection
with the duties to be performed and the services to be rendered by Employee to
Employer under and pursuant to this Agreement, upon submission of itemized
expense statements in the manner and at times specified by Employer for
officers of Employer.  In addition,
the Company shall provide Executive with a $1,300 per month automobile
allowance.


 


6.                                      Employee
Benefits.


 


6.1  
Employee shall be entitled to
participate in all employee insurance, retirement and other benefit plans for
which he qualifies and which may be in effect from time to time.  Notwithstanding the foregoing, nothing
contained in this Agreement shall prohibit or limit the right of Employer to
discontinue, modify or amend any plan or benefit in its absolute discretion at
any time, provided, however, that any such discontinuance, modification or
amendment shall apply to employees of Employer 


 


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generally, or to a defined group of such employees, and shall
not apply solely to Employee.


 


6.2  
Employee shall be entitled each year
to vacation in accordance with standard employment practices, during which time
his compensation shall be paid in full. 
Employee shall be treated for purposes of vacation accrual as an
employee with more than 120 months of service. 
Each vacation shall be taken during a period mutually satisfactory to
both Employer and Employee.


 


6.3  
Zenith shall also provide Employee with such
insurance or other provisions for indemnification, defense or hold harmless of
officers that are generally in effect for senior executive officers of Zenith.


 


7.                                      Death
During Employment.  If Employee
should die during the Term of Employment, Employer shall pay (a) to
Employee’s spouse, if living or (b) if his spouse is not then living, to
his then living issue by right of representation or (c) if none of the above
are then living, to his estate a cash lump sum payment equal to:  (1) one year’s Base Compensation at the
rate in effect at his death and (2) one year’s bonus.  (For these purposes, “bonus” shall mean the
highest annual bonus paid or payable to Employee for the three calendar years
immediately preceding the year of Employee’s death.)  In addition, for a period of two years from
Employee’s death, Employer shall continue to provide Employee’s family with the
same level of medical, dental and vision insurance benefits that they were
receiving through Employer immediately prior to Employee’s death.


 


8.                                      Termination
by Employer.


 


8.1  
Termination by
Employer due to Disability.  Should Employer
terminate the Term of Employment prior to the Expiration Date due to “Disability”
(as defined below) Employer shall pay to Employee a cash lump sum payment
equal to:  (1) one year’s Base
Compensation at the rate in effect at termination (reduced by any amounts
payable to Employee pursuant to any long-term disability plan in effect at the
time of such termination) and (2) one year’s bonus.  (For these purposes, “bonus” shall mean the
highest annual bonus paid or payable to Employee for the three calendar years
immediately preceding the year of
termination.)  In addition, for a period of two
years from Employee’s termination of
employment, Employer shall continue to provide Employee and his family with the
same level of life, medical, dental and vision
insurance benefits that they were receiving through Employer immediately prior
to Employee’s termination of employment.


 


Definition of Disability.  For the purposes of this Agreement, “Disability” shall
mean Employee’s absence from employment with Employer 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 


 


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than twelve (12) months, and
caused Employee to receive income replacement benefits for a period of not
less than three (3) months under an accident and health plan covering
Employer’s employees or (iii) qualifies as a disability under Employer’s
Long Term Disability Plan.


 


8.2  
Termination by
Employer  For Cause.  Should Employer
terminate the Term of Employment prior to the Expiration Date “For Cause” (as
defined below), Employer shall pay to Employee in complete satisfaction of
Employer’s obligations under this Agreement and without waiving any rights
which it or its subsidiaries may have against Employee, the compensation which
would otherwise be payable to him pursuant to Paragraph 4.1 of this Agreement
up to the end of the month in which such termination occurs and Employer shall
not be obligated to make any payments to Employee pursuant to Paragraph 4.2 of
this Agreement.


 


Definition of For Cause.  For the purposes of this Agreement, “For
Cause” shall mean (1) Employee’s failure to substantially perform his
duties or any other material breach of this Agreement by Employee (other than a
failure or breach resulting from his incapacity due to physical or mental
illness, injury or similar incapacity), which failure or breach is not cured
after the passage of a reasonable period of time to cure contained in a written
demand from the CEO and/or Board that specifically describes such failure or
breach; (2) Employee’s participation in activities that are competitive
with Employer’s business, which participation is not cured after the passage of
a reasonable period of time to cure contained in a written demand from the CEO
and/or Board that specifically describes such conduct; (3) Employee’s
conviction of a felony; or (4) Employee’s violation of his duty to
maintain confidentiality as required by Paragraph 15.


 


8.3  
Termination by Employer
other than due to Disability or For Cause.  Should Employer terminate the Term of
Employment prior to the Expiration Date for any reason other than due to
Disability pursuant to Paragraph 8.1 or For Cause pursuant to Paragraph
8.2, Employer shall pay to Employee a cash lump sum payment equal to:  (1) two years’ Base Compensation at the
rate in effect at termination and (2) two years’ bonus.  (For these purposes, “bonus” shall mean the
highest annual bonus paid or payable to Employee for the three calendar years
immediately preceding the year of termination.) 
In addition, for a period of two years from Employee’s termination of
employment, Employer shall continue to provide Employee and his family with the
same level of life, medical, dental and vision insurance benefits that they
were receiving through Employer immediately prior to Employee’s termination of
employment.


 


9.                                      Termination
by Employee.


 


9.1  
Termination by
Employee for Good Reason.  Should Employee terminate the Term of
Employment prior to the Expiration Date for “Good Reason” (as defined below),
Employer shall pay to Employee a cash lump sum payment equal to:  (1) two years’ Base Compensation at the
rate in effect at termination and (2) two years’ bonus.  (For these purposes, “bonus” shall mean the
highest annual bonus paid or payable to Employee for the three calendar years
immediately preceding the year of termination.) 
In addition, for a period of two years from Employee’s termination of
employment, Employer shall continue to provide Employee and his family with the
same level of life, 


 


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medical, dental and vision insurance benefits that they were
receiving through Employer immediately prior to Employee’s termination of
employment.


 


Definition of Good Reason.  For the purposes of
this Agreement, “Good Reason” shall mean (a) material diminution in
Employee Base Compensation; (b) material diminution in authority, duties,
responsibilities or reporting relationship; (c) material diminution in the
budget over which Employee has authority; (d) material change in
geographic work location; or (e) any other material breach of this
Agreement by Employer.


 


9.2  
Other
Termination by Employee.  Should
Employee terminate the Term of Employment prior to the Expiration Date for any
reason other than set forth above, Employee will not be entitled to the
additional payments set forth above.


 


10.                               Prorated
and Prior Year Bonus Payments.


 


10.1  
If a termination under Sections 7, 8
or 9, other than under Section 8.2 (Termination by Employer For Cause) or
under Section 9.2 (Other Termination by Employee) occurs in a given year
on a date on or after July 1 of such year, Employee shall be entitled to
receive a prorated bonus payment for such year .  The prorated bonus payment will be an amount
that is (1) equal to the highest annual bonus paid to Employee for the
three calendar years immediately preceding the year of termination and (2) prorated
from the beginning of the year of termination to the date of termination.


 


10.2  
If a termination under Sections 7, 8
or 9, other than under Section 8.2 (Termination by Employer For Cause) or
under Section 9.2 (Other Termination by Employee) occurs after the end of
a given year but before the annual bonus for such year has been paid, Employee
shall be entitled to receive such annual bonus. 
In the event the amount of the annual bonus has already been determined
in good faith by the Compensation Committee prior to Employee’s termination,
then the annual bonus paid to Employee shall be equal to the amount so
determined.  If, however, the annual
bonus for such year has not yet been so determined, then the amount of annual
bonus shall be equal to the highest annual bonus paid to Employee for the three
calendar years immediately preceding such given year.


 


10.3  
It is agreed that the bonus amounts
referred to in Section 10.1 and 10.2 above shall be in addition to the
other bonus payments that may become payable pursuant to other sections of this
Agreement.


 


11.                               Release
by Employee.  In order to be
entitled to any payment or benefit payable or receivable that are provided for
in this Agreement upon termination of employment, Employee must execute a
release in a form acceptable to Employer, of Employer and its respective
officers, directors, stockholders, employees and agents.


 


12.                               Change
in Control.  In the event of
a Change in Control (as defined below) at any time during the Term of
Employment, all stock option rights, stock appreciation rights, restricted
stock and any and all other similar rights theretofore granted to Employee
shall vest and, if applicable, become exercisable in full.


 


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For purposes of this
Agreement, a Change in Control shall mean either (i) a merger or consolidation
of Zenith with or into another company or corporation, other than (a) a
merger or consolidation which would result in the voting securities of Zenith
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 75% of the combined voting power of the voting
securities of Zenith or such surviving entity outstanding immediately after
such merger or consolidation or (b) a merger or consolidation effected to
implement a recapitalization of Zenith (or similar transaction) in which no “person”
(as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) acquires more than 50% of the combined voting
power of Zenith’s then outstanding securities; or (ii) an assignment of
this Agreement by Zenith under the provisions of Paragraph 19.2 hereof; or (iii) the
sale of all or substantially all of Zenith’s assets; or (iv) a change in
the identities of a majority of the members of the Board within a one-year
period or less; or (v) any other transaction involving a material change
of ownership in Zenith which would require any party or affiliated group of
parties to obtain approval from, or require such transactions to be presented
for approval by, the California Insurance Commissioner (assuming there is no
preemption of California insurance laws by Federal Law).


 


13.                               Excise
Tax. 
Notwithstanding anything to the contrary in this Agreement, in the event
that Employee becomes entitled to severance payments, if any of the severance
payments will be subject to the tax (the “Excise Tax”) imposed by Section 4999
of the Internal Revenue Code of 1986, as amended (the “Code”), Zenith shall pay
to Employee an additional amount (the “Gross-Up Payment”) such that the net
amount retained by Employee, after deduction of any Excise Tax on the Total
Payments (as hereinafter defined) and any federal, state and local income and
other tax and Excise Tax upon the payment provided for herein, shall be equal
to the Total Payments.  For purposes of
determining whether any of the Total Payments will be subject to the Excise Tax
and the amount of such Excise Tax, (i) any other payments or benefits
received or to be received by Employee in connection with a Change in Control
or Employee’s termination of employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with Employer, any person
whose actions result in a Change in Control or any person affiliated with
Employer or such person (which, together with severance payments, shall
constitute “Total Payments”)), shall be treated as “parachute payments” within
the meaning of Section 280G(b)(2) of the Code, and all “excess
parachute payments” within the meaning of Section 280G(b)(1) shall be
treated as subject to the Excise Tax, unless in the opinion of tax counsel
selected by Zenith’s independent auditors and acceptable to Employee, such
other payments or benefits (in whole or in part) do not constitute parachute
payments, or such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4) of
the Code in excess of the base amount, within the meaning of Section 280G(b)(3) of
the Code, or are otherwise not subject to the Excise Tax, (ii) the amount
of the Total Payments which shall be treated as subject to the Excise Tax shall
be equal to the lesser of (A) the total amount of the Total Payments or (B) the
amount of excess parachute payments within the meaning of Section 280G(b)(1) (after
applying clause (i), above), and (iii) the value of any non-cash benefits
or any deferred payment or benefit shall be determined by Zenith’s independent
auditors in accordance with the principles of Sections 280G(d)(3) and (4) of
the Code.  For purposes of 


 


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determining the amount of the
Gross-Up Payment, Employee shall be deemed to pay federal income taxes at the
highest marginal rate of federal income taxation in the calendar year in which
the Gross-Up Payment is to be made and state and local income taxes at the
highest marginal rate of taxation in the state and locality of Employee’s
residence on the date of termination of employment, net of the maximum
reduction in federal income taxes which could be obtained from deduction of
such state and local taxes.  In the event
that the Excise Tax is subsequently determined to be less than the amount taken
into account hereunder at the time of termination of Employee’s employment,
Employee shall repay to Zenith, at the time that the amount of such reduction
in Excise Tax is finally determined, the portion of the Gross-Up Payment
attributable to such reduction (plus that portion of the Gross-Up Payment
attributable to the Excise Tax and federal, state and local income tax imposed
on the Gross-Up Payment being repaid by Employee to the extent
that such repayment results in a reduction in Excise Tax and/or a federal,
state or local income tax deduction) plus interest on the amount of such
repayment at the rate provided in Section 1274(b)(2)(B) of the
Code.  In the event that the Excise Tax
is determined to exceed the amount taken into account hereunder at the time of
the termination of Employee’s employment (including by reason of any payment
the existence or amount of which cannot be determined at the time of the
Gross-Up Payment), Zenith shall make an additional Gross-Up Payment in respect
of such excess (plus any interest, penalties or additions payable by Employee with respect to
such excess) at the time that the amount of such excess is finally determined.


 


The Gross-Up Payment shall be made not later than the fifth
day following the date of termination of employment, provided, however, that if
the amounts of such payments cannot be finally determined on or before such
day, Zenith shall pay to Employee on such day an estimate, as determined in
good faith by Zenith, of the minimum amount of such payments to which Employee
is clearly entitled and shall pay the remainder of such payments (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code)
as soon as the amount thereof can be determined but in no event later than the
thirtieth (30th) day after the date of termination of employment.  In the event that the amount of the estimated
payments exceeds the amount subsequently determined to have been due, such
excess shall constitute a loan by Zenith to Employee, payable on the fifth
(5th) business day after demand by Zenith (together with interest at the rate
provided in Section 1274(b)(2)(B) of the Code).  At the time that payments are made under this
Paragraph, Zenith shall provide Employee with a written statement setting forth
the manner in which such payments were calculated and the basis for such
calculations including, without limitation, any opinions or other advice Zenith
has received from outside counsel, auditors or consultants (and any such
opinions or advice which are in writing shall be attached to the statement).


 


14.                               Acknowledgment
of Peculiar Value of Services.


 


14.1  
Employee acknowledges that the
services which he has agreed to render during the Term of Employment under this
Agreement are special, unique, unusual, extraordinary and of an intellectual
character, and therefore are of peculiar value to Employer.


 


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14.2  
Employee further acknowledges that
because of the character of said services the remedy at law for any breach by
him of this Agreement may be enforced by an injunction in a suit in equity,
without the necessity of proving actual damage, and that a temporary injunction
may be granted immediately upon the commencement of any such suit.  Nothing herein contained shall be construed
as prohibiting Employer from pursuing any other remedies available to Employer
from such breach or threatened breach, including the recovery of damages from
Employee.


 


15.                               Confidential
Information and Non-Competition


 


15.1  
During the Term of Employment and
thereafter, Employee
shall not, except as may be required to perform his duties hereunder or as
required by applicable law, disclose to others or use, whether directly or
indirectly, any Confidential Information regarding Employer.  “Confidential Information” shall mean
information about Employer
and its clients and customers that is not available to the general public and
that was learned by Employee in the course of his employment by Employer, including
(without limitation) any data, formulae, information, proprietary knowledge, trade
secrets and client and customer lists and all papers, resumes, records and the
documents containing such Confidential Information.  Employee acknowledges that such Confidential
Information is specialized, unique in nature and of great value to Employer, and that
such information gives Employer
a competitive advantage.  Upon the
termination of his employment for any reason whatsoever, Employee shall
promptly deliver to Employer
all documents (and all copies hereof) containing any Confidential Information.


 


15.2  
During the term of this Agreement
and for two years following termination of employment, Employee shall not,
directly or indirectly, without the prior written consent of Employer, provide
consultative service (with or without pay) to, own, manage, operate, join,
control, participate in, or be connected (as a stockholder, partner, or
otherwise) with, any business, individual, partner, firm, corporation or other
entity that is then in competition with Employer (a “Competitor of Employer”); provided, however, that the “beneficial ownership” by
Employee, either individually or as a member of a “group,” as such terms are
used in Rule 13d of the General Rules and Regulations under the
Securities Exchange Act of 1934, of not more than one percent (1%) of the
voting stock of any publicly held corporation shall not be a violation of this
Agreement.  It is further expressly
agreed that Employer
will or would suffer irreparable injury if Employee were to compete with Employer or any
affiliate of Employer
in violation of this Agreement.  Employer hereby acknowledges and agrees that Employee shall
have the right to serve in any capacity with civic, educational, charitable and
professional organizations and to make and manage personal business investments
that do not violate the provisions of this Paragraph 15, so long as such
activities do not interfere with the discharge of Employee’ duties to Employer
hereunder.


 


15.3  
During the Term of Employment and
for one year following termination of employment, Employee shall not, directly
or indirectly, influence or attempt to influence customers or suppliers of Employer to divert
their business to any Competitor of Employer.


 


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15.4  
Employee recognizes that he will
possess confidential information about other employees of Employer relating to
their education, experience, skills, abilities, compensation and benefits, and
interpersonal relationships with customers of Employer.  Employee recognizes that the information he
will possess about these other employees is not generally known, is of
substantial value to Employer
in developing its products and in securing and retaining customers, and will be
acquired by him because of his business position with Employer.  Employee agrees that, during the Term of
Employment and for one year following termination of employment, Employee will
not, directly or indirectly, solicit or recruit any employee of Employer for the
purpose of being employed by him, or any business, individual, partner, firm,
corporation or other entity that is then a Competitor of Employer.  Employee further agrees that he will not
convey any such confidential information or trade secrets about other employees
of Employer to any
Competitor of Employer or to anyone affiliated with him or with any Competitor
of Employer.


 


15.5  
Employee further acknowledges that
the remedy at law for any breach by him of the covenants contained in this
Paragraph 15 will be inadequate and that in the event of a breach, or
threatened breach, by Employee of the covenants contained therein, Employer
shall be entitled to an injunction restraining Employee from using, for his own
benefit, and/or from disclosing, in whole or in part, the list of the customers
of Employer and/or trade secrets or other confidential information of Employer,
and/or from rendering any services to any person, firm, corporation,
association or other entity to whom such a list, and/or such trade secrets or
other confidential information, in whole or in part, have been disclosed, or
are threatened to be disclosed and such other declaratory relief as is proper
to cause Employee to return to Employer any and all memoranda, specifications,
documents and all other material relating to the business of Employer that he
may have under his possession or control. 
Nothing herein shall be construed as prohibiting Employer from pursuing
any other remedies available to Employer from such breach or threatened breach,
including the recovery of damages from Employee.  The provisions of this Paragraph 15 shall
survive the expiration or termination, for any reason, of this Agreement and of
Employee’s employment.


 


16.                               Attorney’s
Fees.  In the event
that any action at law or in equity, for injunctive or declaratory relief, is
brought to enforce or interpret the provisions of this Agreement, if Employee
is the prevailing party, he shall be entitled to reasonable attorney’s fees in
addition to any other relief to which he may be entitled.


 


17.                               Applicable
Law.  This Agreement
and the rights and obligations of the parties hereunder shall be construed,
interpreted and enforced in accordance with, and governed by, the laws of the
State of California applicable to agreements executed and to be fully performed
thereunder.


 


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18.                               Notices.  Any notice required to be
given hereunder shall be in writing sent by registered or certified mail,
return receipt requested, to either Zenith or employee at the addresses listed
below, or at such other addresses as either Zenith or Employee may hereafter
designate in writing to the other:


 


	
  To
  Zenith:

  	
  Zenith
  National Insurance Corp.

  
	
   

  	
  21255
  Califa Street

  
	
   

  	
  Woodland
  Hills, California 91367

  
	
   

  	
  Attention:
  Corporate Secretary

  
	
   

  	
   

  
	
  To
  Employee:

  	
  Michael
  E. Jansen

  
	
   

  	
  29463
  Malibu View Court

  
	
   

  	
  Agoura
  Hills, CA 91301

  



 


19.                               Assignment.


 


19.1  
This Agreement and the rights,
interests and benefits hereunder are personal to Employee and shall not be
assigned, transferred, pledged or hypothecated in any way by Employee, and
shall not be subject to execution, attachment or similar process.  Any attempted assignment, transfer, pledge,
or hypothecation, or the levy of any execution, attachment or similar process
thereon, shall be null and void and without effect.


 


19.2  
Zenith shall have the right to
assign this Agreement and to delegate all of its rights, duties and obligation
hereunder, whether in whole or in part, to any parent, affiliate, successor, or
subsidiary organization or company of Zenith or corporation with which Zenith
may merge or consolidate or which acquires by purchase or otherwise all or
substantially all of Zenith’s consolidated assets, but such assignment shall
not release Employer from its obligations under this Agreement.


 


20.                               Entire
Agreement.  This Agreement
constitutes the entire understanding of the parties hereto related to the
subject matter hereof and supersedes any and all prior agreements and
understanding, whether oral or written between the parties.  This Agreement may only be modified by an
agreement in writing executed by Employee and one of
Zenith’s duly authorized officers (other than Employee), with the approval of
the Compensation Committee.


 


21.                               Waiver
of Breach.  The waiver by
Employee of a breach of any provision of this Agreement by Employee shall not
operate or be construed as a waiver of any subsequent breach by Employee.


 


22.                               Arbitration.


 


22.1  
In the event there is any dispute
between Employee
and Employer
which the parties are unable to resolve themselves, including any dispute with
regard to the application, interpretation or validity of this Agreement or any
dispute with regard to any aspect of Employee’s employment or the termination of Employee’s
employment, 


 


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both Employee and Employer agree by entering into this Agreement that the exclusive
remedy for determining any such dispute, regardless of its nature, will be by
arbitration in accordance with the then most applicable rules of the
American Arbitration Association. 
Arbitration shall be the exclusive remedy for determining any such
dispute, regardless of its nature. 
Notwithstanding the foregoing, either party may in an appropriate matter
apply to a court pursuant to California Code of Civil Procedure Section 1281.8,
or any comparable provision, for provisional relief, including a temporary
restraining order or a preliminary injunction, on the ground that the award to
which the applicant may be entitled in arbitration may be rendered ineffectual
without provisional relief.


 


22.2  
In the event the parties are unable
to agree upon an arbitrator, the parties shall select a single arbitrator from
a list designated by the Los Angeles office of the American Arbitration
Association of seven arbitrators all of whom shall be retired judges who have
had experience in the employment law, who are actively involved in hearing
private cases and who are resident in the greater Los Angeles area.  If the parties are unable to select an
arbitrator from the list provided by the American Arbitration Association, then
the parties 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.  Any arbitration shall be
administered by the American Arbitration Association only if both parties so
agree.


 


22.3  
This agreement to resolve any
disputes by binding arbitration shall extend to claims against any shareholder
or partner of Employer, any brother-sister company, parent, or affiliate of Employer, any
officer, director, employee, or agent of Employer, or of any of the above, and shall apply as well to claims
arising out of state and federal statutes and local ordinances as well as to
claims arising under the common law.  In
the event of a dispute subject to this Paragraph, the parties shall be entitled
to reasonable discovery, including deposition discovery, subject to the
discretion of the arbitrator.  The
arbitrator shall apply the same substantive law as would be applied by a court
having jurisdiction over the parties and their dispute and the remedial
authority of the arbitrator shall be the same as, but no greater than, would be
the remedial power of a court having jurisdiction over the parties and their
dispute.  The arbitrator shall, upon an
appropriate motion, dismiss any claim brought in arbitration if the arbitrator
determines that the claim does not state a claim or a cause of action which
could have been properly pursued through court litigation.  In the event of a conflict between the then
most-applicable rules of the American Arbitration Association and these
procedures, the provisions of these procedures shall govern.


 


22.4  
Each party may be represented by
counsel or other representative of the party’s choice and each party shall
initially be responsible for the costs and fees of its counsel or other
representative.  Any filing or
administrative fees shall be borne initially by the party requesting
arbitration; provided, however, if such fees should exceed those applicable in
Superior Court (or other state court of general jurisdiction if in a state
other than California) the excess shall be borne by Employer.  Employer shall be responsible for the costs
and fees of the arbitrator, unless Employee wishes to contribute (up to 50%) of
the costs and fees of the arbitrator. 
The prevailing party in such arbitration proceeding, as determined by
the arbitrator, and in any enforcement or other court 


 


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proceedings, shall be entitled to the extent permitted 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 attorneys’ fees.


 


22.5  
The arbitrator shall render an award
and opinion in the form typical of that rendered in labor arbitrations and the
award of the arbitrator shall be final and binding upon the parties.  If any of the provisions of this Paragraph
are determined to be unlawful or otherwise unenforceable, in whole or in part,
such determination shall not affect the validity of the remainder of these
provisions and this Paragraph shall be reformed to the extent necessary to
insure that the resolution of all conflicts between Employee and Employer
including those arising out of statutory claims, shall be resolved by neutral,
binding arbitration.  In the event a
court finds that the arbitration procedure set forth herein is not absolutely
binding, then it is the intent of the parties that any arbitration decision
should be fully admissible in evidence, given great weight by any finder of
fact and treated as determinative to the maximum extent permitted by law.


 


22.6  
Unless mutually agreed by the
parties otherwise, any arbitration shall take place in Los Angeles.  In the event the parties are unable to agree
upon a location for the arbitration, the location within Los Angeles shall be
determined by the arbitrator.


 


22.7  
In the event of a good faith dispute
regarding the payment of salary or benefits under this Agreement, Employer
shall make the disputed payments to Employee as if such dispute did not exist
during the pendency of such good faith dispute, and, following the resolution
of such dispute, Employee shall reimburse Employer for any overpayments.


 


23.                               Miscellaneous.


 


23.1  
The titles of the paragraphs of this
Agreement are for convenience of reference only, and are not to be considered
in construing this Agreement.


 


23.2  
The unenforceability or invalidity
of any paragraph or subparagraph of this Agreement shall not affect the
enforceability and validity of the balance of this Agreement.


 


23.3  
Each party hereto shall make,
execute and deliver such other instruments or documents as may be reasonably
required in order to effectuate the purpose of this Agreement.


 


23.4  
Employer shall also pay any
additional amount necessary to reimburse Employee and/or his family for any
taxes imposed solely by reason of receipt of life, medical, dental or vision
insurance benefits following Employee’s termination of employment or death, as
applicable.


 


Notwithstanding the foregoing, Employer shall not provide any
medical, dental or vision benefit otherwise receivable by Employee and/or his
family pursuant to Paragraphs 7, 8.1, 8.3 and 9 if an equivalent benefit is
actually received by Employee and/or his family 


 


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at any time during the period of coverage, and any such
benefit actually received shall be reported to Zenith by Employee and/or his
family.


 


23.5  
It is the understanding and intent
of the parties hereto, and Employer represents and warrants, that no payment or
distribution that could be made pursuant to the provisions of this Agreement
constitutes an item of deferred compensation under Section 409A of the
Code (“Deferred Compensation”). 
Nevertheless, the following provision is included in this Agreement for
technical compliance with 409A of the Code:


 


Notwithstanding any provision to
the contrary in this Agreement, no payment or distribution under this Agreement
which constitutes “409A Deferred Compensation” and becomes payable by reason of
Employee’s termination of employment with Employer will be made to Employee unless Employee’s termination of employment constitutes a “separation
from service” (as such term is defined in Treasury Regulations issued under Section 409A
of the Code).  In addition, no such
payment or distribution of 409A Deferred Compensation will be made to Employee prior to the earlier of (i) the expiration of the six
(6)-month period measured from the date of Employee’s “separation from service”
(as such term is defined in Treasury Regulations issued under Section 409A
of the Code) or (ii) the date of Employee’s death, if Employee is deemed
at the time of such separation from service to be a “key employee” within the
meaning of that term under Section 416(i) of the Code and such
delayed commencement is otherwise required in order to avoid a prohibited
distribution under Section 409A(a)(2) of the Code.  Upon the expiration of the applicable Code Section 409A(a)(2) deferral
period, all payments and benefits deferred pursuant to this Paragraph 23.5
(whether they would have otherwise been payable in a single sum or in
installments in the absence of such deferral) shall be paid or reimbursed to
Employee in a lump sum, and any remaining payments due under this Agreement
will be paid in accordance with the normal payment dates specified for them
herein.  It is intended that this
Agreement shall comply with the provisions of Section 409A of the Code and
the Treasury Regulations relating thereto so as not to subject Employee to the
payment of additional taxes and interest under Section 409A of the
Code.  In furtherance of this intent,
this Agreement shall be interpreted, operated and administered in a manner
consistent with these intentions.


 


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IN WITNESS WHEREOF, the
parties hereto have executed this Agreement in Woodland Hills, California, on
the date indicated below.


 


 


	
   

  	
   

  	
  ZENITH
  NATIONAL INSURANCE CORP.

  
	
   

  	
   

  	
  (“Zenith”)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Stanley R. Zax

  
	
   

  	
   

  	
   

  	
  Stanley R. Zax

  
	
   

  	
   

  	
   

  	
  Chairman and President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
    June 3,
  2009

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Michael
  E. Jansen (“Employee”)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Michael E. Jansen

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
    June 3,
  2009

  



 


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