Document:

Exhibit
10.1

 

SPECIAL DISCRETIONARY BONUS FOR THE CHIEF
EXECUTIVE OFFICER

 

The
following is a description of a special discretionary bonus to be paid to the
Chief Executive Officer of Zenith National Insurance Corp. (the “Company”)
outside of the Executive Officer Bonus Plan. 
This description is provided pursuant to Paragraph 10(iii) to Item 601
of Regulation S-K requiring a written description of a compensatory arrangement
when no formal document contains the compensation information.

 

In addition to other
compensation arrangements that the Company has adopted, the Compensation
Committee, in its discretion, may award bonuses on a recurring or nonrecurring
basis outside of the Executive Officer Bonus Plan in amounts that are
determined, taking into account factors used to determine Executive Officers’
base compensation and any other factors the Compensation Committee determines
to be relevant.  Amounts paid as special
discretionary bonuses do not come under the exceptions set out in Section
162(m) of the Internal Revenue Code of 1986, as amended, and may not be
deductible for federal income tax purposes to the extent a recipient’s other
income is greater than $1,000,000 and does not fall within one of the
exceptions.

 

On January 12, 2005, the
Compensation Committee of the Board of Directors of the Company awarded Stanley
R. Zax, Chairman and President, a special discretionary bonus of
$1,000,000.  This bonus was in
recognition of the performance in the Company’s investment portfolio that was
achieved in 2004 due to Mr. Zax’s direct involvement.Exhibit 10.5

 

COURIER CORPORATION

 

AMENDED AND RESTATED 1993 STOCK INCENTIVE PLAN

AS MOST RECENTLY AMENDED

 

(and after adjusting the number of shares
referred to herein by taking into effect the

3-for-2 stock splits effected during 1998,
2001 and 2003)

 

1.                                       PURPOSE

 

The purpose of this Amended and
Restated 1993 Stock Incentive Plan (the “Plan”) is to encourage key employees
of Courier Corporation (the “Company”) and its Subsidiaries (as hereinafter
defined) to continue their association with the Company, by providing favorable
opportunities for them to participate in the ownership of the Company and in
its future growth through the granting of stock, stock options and other rights
to compensation in amounts determined by the value of the Company’s stock (the “Awards”).
The term “Subsidiary” as used in the Plan means a corporation of which the
Company owns, directly or indirectly through an unbroken chain of ownership,
fifty percent (50%) or more of the total combined voting power of all classes
of stock.

 

2.                                       ADMINISTRATION OF THE PLAN

 

The Plan shall be administered
by the Compensation and Management Development Committee (the “Committee”)
composed of at least three members of the Board of Directors of the Company
(the “Board”), and may include those members serving at any time and from time
to time as the Committee; provided, however, that each member of the Committee
shall be an “outside director” within the meaning of Section 162(m) of the
Internal Revenue Code of 1986, as amended (the “Code”) and the regulations
promulgated thereunder, and a “non-employee director” within the meaning of
Rule 16b-3(b)(3)(i) of the Securities Exchange Act of 1934 (the “Exchange
Act”), or any successor definition under said Rule. In the event that a vacancy
occurs on account of the resignation of a member or the removal of a member by
vote of the Board, a successor member shall be appointed by vote of the Board.

 

As to all key employees who are
officers of the Company or a Subsidiary within the meaning of
Section 16(b) of the Exchange Act, the Committee shall from time to time
determine to whom options or other rights shall be granted under the Plan,
whether options (“Options”) granted shall be incentive stock options (“ISOs”)
or non-qualified stock options (“NSOs”), the terms of the Options or other
Awards, and the number of shares which may be granted under Options. The
Committee shall report to the Board the names of individuals to whom Awards are
to be granted, the number of shares covered and the terms and conditions of
each grant. As to other persons, the determinations described in this paragraph
may be made by the Committee or by the Board, as the Board shall direct in its
discretion, and references in the Plan to the Committee shall be understood to
refer to the Board in any such case.

 

The Committee shall select one
of its members as Chairman and shall hold meetings at such times and places as
it may determine. A majority of the Committee shall constitute a quorum, and
acts of the Committee at which a quorum is present, or acts reduced to or
approved in writing by all the members of the Committee, shall be the valid
acts of the Committee. The Committee shall have the authority to adopt, amend
and rescind such rules and regulations as, in its opinion, may be advisable in
the administration of the Plan. All questions of interpretation and application
of such rules and regulations of the Plan and of Awards granted thereunder
shall be subject to the determination of the Committee, which shall be final
and binding. The Plan shall be administered in such a manner as to permit those

 

i

 

Options granted hereunder and specially
designated under Section 5 to qualify as ISOs as described in
Section 422 of the Code.

 

3.                                       STOCK SUBJECT TO THE PLAN

 

The total number of shares of
stock which may be subject to Awards under the Plan was initially 130,000
shares and was increased (i) in 1996 by 100,000 shares (the “1996 Newly
Available Shares”), (ii) in 1998 by 115,000 shares by virtue of a 3-for-2
stock split effected by a 50% stock dividend (the “1998 Newly Available Split
Shares”), (iii) in 1999 by 100,000 shares (the “1999 Newly Available
Shares”), (iv) in 2001 by 100,000 shares (the “2001 Newly Available Shares”),
(v) subsequently in 2001 by 272,500 shares by virtue of a 3-for-2 stock
split effected by a 50% stock dividend (the “2001 Newly Available Split Shares”),
(vi) in 2003 by 408,750 shares by virtue of a 3-for-2 stock split effected
by a 50% stock dividend (the “2003 Newly Available Split Shares”), and
(vii) in 2004 by 150,000 shares to an aggregate of 1,376,250 shares of the
Company’s Common Stock, $1.00 par value per share (the “Common Stock”), from
either authorized but unissued shares or treasury shares. For purposes of this
limitation, shares of Common Stock underlying any Awards that are forfeited,
cancelled, held back upon exercise of an Option or settlement of other Awards
to cover the exercise price or tax withholding, reacquired by the Company prior
to vesting, satisfied without the issuance of Common Stock or otherwise
terminated (other than by exercise) shall be added back to the shares of Common
Stock available for issuance under the Plan. Additionally, no more than 25,000
shares of Common Stock may be granted to any one individual pursuant to Options
in any calendar year and from and after November 3, 2004, no more than
150,000 shares of Common Stock may be issued in the form of ISOs. The foregoing
number of shares and limitations shall be subject to adjustment in accordance
with the provisions of Section 12.

 

4.                                       ELIGIBILITY

 

The individuals who shall be
eligible for grant of Awards under the Plan shall be key employees who render
services of special importance to the management, operation, or development of
the Company or a Subsidiary, and who have contributed or may be expected to
contribute materially to the success of the Company or a Subsidiary. The term “Participant,”
as used in the Plan, refers to any employee to whom an Award has been granted.

 

5.                                       TERMS AND CONDITIONS OF OPTIONS

 

Every Option shall be evidenced
by a written Stock Option Agreement in such form as the Committee shall approve
from time to time, specifying the number of shares of Common Stock that may be
purchased pursuant to the Option, the time or times at which the Option shall
become exercisable in whole or in part, whether the Option is intended to be an
ISO or an NSO, and such other terms and conditions as the Committee shall
approve, and containing or incorporating by reference the following terms and
conditions:

 

(a)  Duration.  The duration of each Option shall be as
specified by the Committee in its discretion; provided, however, that no ISO
shall expire later than ten (10) years from its date of grant, and no ISO
granted to an employee who owns (directly or under the attribution rules of
Section 424(d) of the Code) stock possessing more than ten percent (10%)
of the total combined voting power of all classes of stock of the Company or
any Subsidiary shall expire later than five (5) years from its date of
grant.

 

(b)  Exercise
Price.  The exercise price of
each Option shall be at least one hundred percent (100%) of the fair market
value of the shares on the date on which the Committee awards the Option, which
shall be considered the date of grant of the Option for purposes of fixing the
price; provided that the price with respect to an ISO granted to an employee
who at the time of grant owns (directly or under the attribution rules of
Section 424(d) of the Code) stock representing more than ten percent (10%)
of the voting power of all classes of stock of the Company or of any Subsidiary
shall be at least

 

ii

 

one hundred ten percent (110%) of the fair market value of the shares
on the date of grant of the ISO. For purposes of the Plan, except as may be
otherwise explicitly provided in the Plan or in any Stock Option Agreement,
Restricted Stock Agreement, Restricted Stock Unit Agreement or similar
document, the “fair market value” of a share of Common Stock at any particular
date shall be determined according to the following rules: (i) if the
Common Stock is at the time listed on any stock exchange or Nasdaq system, then
the fair market value shall be the closing price of the Common Stock on the
date in question; or (ii) if the Common Stock is not at the time listed on
a stock exchange or Nasdaq system, the fair market value shall be determined in
good faith by the Board, which may take into consideration (1) the price
paid for the Common Stock in the most recent trade of a substantial number of
shares known to the Board to have occurred at arm’s length between willing and
knowledgeable investors, or (2) an appraisal by an independent party, or
(3) any other method of valuation undertaken in good faith by the Board, or
some or all of the above as the Board shall in its discretion elect.

 

(c)  Method of Exercise.  To the extent that it has become exercisable
under the terms of the Stock Option Agreement, an Option may be exercised from
time to time by written notice to the Secretary, Assistant Secretary or Chief
Financial Officer of the Company stating the number of shares with respect to
which the Option is being exercised and accompanied by payment of the exercise
price in cash or check payable to the Company.

 

Alternatively, payment of the
exercise price may be made, in whole or in part, by the delivery (or
attestation to the ownership) of shares of Common Stock owned by the
Participant for at least six months or purchased by the Participant on the open
market. If payment is made in whole or in part in shares of Common Stock, then
the Participant shall deliver to the Company certificates registered in his
name representing a number of shares of Common Stock legally and beneficially
owned by him, fully vested and free of all liens, claims and encumbrances of
every kind and having a fair market value on the date of delivery that is not
greater than the exercise price, such certificates to be duly endorsed, or
accompanied by stock powers duly endorsed, by the record holder of the shares
represented by such certificates. In the event a Participant chooses to pay the
exercise price by previously-owned shares of Common Stock through the
attestation method, the number of shares of Common Stock transferred to the
Participant upon the exercise of the Option shall be net of the shares attested
to. If the exercise price exceeds the fair market value of the shares for which
certificates are delivered, the Participant shall also deliver cash or a check
payable to the order of the Company in an amount equal to the amount of that
excess.

 

Options may be exercised by
means of a “cashless exercise” procedure in which a broker (i) transmits
the option price to the Company in cash or acceptable cash equivalents, either
(1) against the Participant’s notice of exercise and the Company’s
confirmation that it will deliver to the broker stock certificates issued in
the name of the broker for at least that number of shares having fair market
value equal to the option price, or (2) as the proceeds of a margin loan
to the Participant; or (ii) agrees to pay the option price to the Company
in cash or acceptable cash equivalents upon the broker’s receipt from the
Company of stock certificates issued in the name of the broker for at least
that number of shares having fair market value equal to the option price. The
Participant’s written notice of exercise of an Option pursuant to a “cashless
exercise” procedure must include the name and address of the broker involved, a
clear description of the procedure, and such other information or undertaking
by the broker as the Committee shall reasonably require.

 

At the time specified in a
Participant’s notice of exercise, which shall not be earlier than the fifteenth
(15th) day after the date of the notice except as may be mutually agreed, the
Company shall, without issue or transfer tax to the Participant, deliver to him
at the main office of the Company, or such other place as shall be mutually
acceptable, a certificate for the shares as to which his Option is exercised.
If the Participant fails to pay for or to accept delivery of all or any part of
the number of

 

iii

 

shares specified in his notice upon tender of
delivery thereof, his right to exercise the Option with respect to those shares
shall be terminated, unless the Company otherwise agrees.

 

(d)  Nonassignability of Options.  No Option shall be assignable or transferable
by the Participant except by will or by the laws of descent and distribution.
During the life of a Participant, the Option shall be exercisable only by the
Participant.

 

(e)  Notice of ISO Stock
Disposition.  The Participant
must notify the Company promptly in the event that the Participant sells,
transfers, exchanges or otherwise disposes of any shares of Common Stock issued
upon exercise of an ISO, before the later of (i) the second anniversary of
the date of grant of the ISO, and (ii) the first anniversary of the date
the shares were issued upon the Participant’s exercise of the ISO.

 

(f)  Effect of Cessation of
Employment.  The Committee
shall determine in its discretion and specify in each Stock Option Agreement
the effect, if any, of the termination of the Participant’s employment upon the
exercisability of the Option.

 

(g)  No Rights as Stockholder.  A Participant shall have no rights as a
stockholder with respect to any shares covered by an Option until the date of
issuance of the shares to the Participant, either electronically or by means of
a stock certificate. No adjustment shall be made for dividends or other rights
for which the record date is earlier than the date the certificate is issued,
other than as required or permitted pursuant to Section 12.

 

6.                                       RESTRICTED STOCK

 

The Committee may grant or award
shares of Restricted Stock to Participants, subject to such terms or conditions
as it shall determine and specify in a Restricted Stock Agreement. In the event
that any such Restricted Stock shall have a performance-based goal, the
restriction period with respect to such shares shall not be less than one year,
and in the event any such Restricted Stock shall have a time-based restriction,
the restriction period with respect to such shares shall not be less than three
years.

 

A holder of Restricted Stock
shall have all of the rights of a stockholder of the Company, including the
right to vote the shares and the right to receive any cash dividends, unless
the Committee shall otherwise determine. Certificates representing Restricted
Stock shall be imprinted with a legend to the effect that the shares
represented may not be sold, exchanged, transferred, pledged, hypothecated or
otherwise disposed of except in accordance with the terms of the Restricted
Stock Agreement, and, if the Committee so determines the Participant may be
required to deposit the certificates with the Company, together with a stock
power or other instrument or transfer appropriately endorsed in blank.
Restricted Stock may also be issued in book entry form with a similar legend.

 

7.                                       RESTRICTED STOCK UNITS

 

The Committee may grant or award
Restricted Stock Units to Participants, subject to such terms or conditions as
it shall determine and specify in a Restricted Stock Unit Agreement. In the
event that any such Restricted Stock Unit shall have a performance-based goal,
the restriction period with respect to such shares shall not be less than one
year, and in the event any such Restricted Stock Unit shall have a time-based
restriction, the restriction period with respect to such shares shall not be
less than three years. At the end of the deferral period, which may either be
specified by the Committee in the Restricted Unit Agreement or elected by the
Participant in advance under such terms or conditions specified by the
Committee, the Restricted Stock Units shall be issued to the Participant in the
form of shares of Common Stock on a one-to-one basis.

 

During the deferral period prior
to actual issuance of Common Stock, a holder of Restricted Stock Units shall
have no rights as a stockholder of the Company; provided, however, that the
Committee may provide in the Restricted Stock Unit Agreement that the holder shall
receive cash compensation

 

iv

 

from time to time in an amount equivalent to
the dividends that would have been paid with respect to his Restricted Stock
Units if such Units were actually shares of outstanding Common Stock.

 

Restricted Stock Units may not
be sold, assigned, transferred, pledged or otherwise encumbered or disposed of
during the deferral period.

 

8.                                       UNRESTRICTED STOCK

 

In its discretion, the Committee
may grant shares of Common Stock not subject to any risk of forfeiture (“Unrestricted
Stock”) to Participants in recognition of long service to the Company. Each
such Award shall not be in excess of 500 shares.

 

9.                                       SPECIAL BONUS GRANTS

 

In its discretion, the Committee
may grant in connection with any NSO or grant of Restricted Stock or
Unrestricted Stock a special bonus in an amount not to exceed the lesser of
(i) the combined federal, state and local income tax liability incurred by
the Participant as a consequence of his acquisition of Common Stock pursuant to
the exercise of the NSO or the grant or vesting of the Restricted Stock or
Unrestricted Stock, or (ii) thirty percent (30%) of the imputed income
realized by the Participant on account of such exercise, grant or vesting. Any
such special bonus shall be payable solely to federal, state and local taxing
authorities for the benefit of the Participant at such time or times as
withholding payments of income tax may be required. In the event that an NSO
with respect to which a special bonus has been granted becomes exercisable by
the personal representative of the estate of the Participant, or that
Restricted Stock with respect to which a special bonus has been granted shall
vest after the death of a Participant, the bonus shall be payable to or for the
benefit of the estate in the same manner and to the same extent as it would
have been payable for the benefit of the Participant had he survived to the
date of exercise or vesting. A special bonus may be granted simultaneously with
a related NSO or Restricted Stock or Unrestricted Stock grant or separately
with respect to an outstanding NSO or Restricted Stock or Unrestricted Stock
granted at an earlier date.

 

10.                                 METHOD OF GRANTING AWARDS

 

The grant of Awards shall be
made by action of the Committee at a meeting at which a quorum of its members
is present, or by unanimous written consent of all its members; provided,
however, that if an individual to whom a grant has been made fails to execute
and deliver to the Committee a Stock Option Agreement, Restricted Stock
Agreement or Restricted Stock Unit Agreement within ten (10) days after it
is submitted to him, the Awards granted under the Agreement shall be voidable by
the Company at its election, without further notice to the Participant.

 

11.                                 REQUIREMENTS OF LAW

 

The Company shall not be
required to transfer any Common Stock or to sell or issue any shares upon the
exercise of any Option if the issuance of such shares will result in a
violation by the Participant or the Company of any provisions of any law,
statute or regulation of any governmental authority. Specifically, in
connection with the Securities Act of 1933, as amended (the “Securities Act”),
upon the transfer of Common Stock or the exercise of any Option the Company
shall not be required to issue shares unless the Board has received evidence
satisfactory to it to the effect that the holder of the Award will not transfer
such shares except pursuant to a registration statement in effect under the
Securities Act or unless an opinion of counsel satisfactory to the Company has
been received by the Company to the effect that such registration is not
required. Any determination in this connection by the Board shall be conclusive.
The Company shall not be obligated to take any other affirmative action in
order to cause the transfer of Common Stock or the exercise of an Option to
comply with any law or regulations of any governmental authority, including
without limitation, the Securities Act or applicable state securities laws.

 

v

 

12.                                 CHANGES IN CAPITAL STRUCTURE

 

In the event that the
outstanding shares of Common Stock are hereafter changed for a different number
or kind of shares or other securities of the Company, by reason of a
reorganization, recapitalization, exchange of shares, stock split, combination
of shares or dividend payable in shares or other securities, a corresponding
adjustment shall be made by the Committee in the number and kind of shares or
other securities covered by outstanding Awards, and for which Awards may be
granted under the Plan. Any such adjustment in outstanding Awards shall be made
without change in the total price applicable to the unexercised portion of the
Option, but the price per share, if any, specified in each Stock Option
Agreement, Restricted Stock Agreement or Restricted Stock Unit Agreement shall
be correspondingly adjusted; provided, however, that no adjustment shall be
made with respect to an ISO that would constitute a modification as defined in
Section 424 of the Code. Any such adjustment made by the Committee shall
be conclusive and binding upon all affected persons, including the Company and
all Participants.

 

If while unexercised Options
remain outstanding under the Plan the Company merges or consolidates with one
or more corporations (whether or not the Company is the surviving corporation),
or if the Company is liquidated or sells or otherwise disposes of substantially
all of its assets to another entity, then, except as otherwise specifically
provided to the contrary in a Participant’s Stock Option Agreement, the
Committee, in its discretion, shall amend the terms of all outstanding Options
so that either:

 

(i)                                     after the effective date of such merger,
consolidation or sale, as the case may be, each Participant shall be entitled,
upon exercise of an Option, to receive in lieu of shares of Common Stock the
number and class of shares of such stock or other securities to which he would have
been entitled pursuant to the terms of the merger, consolidation or sale if he
had been the holder of record of the number of shares of Common Stock as to
which the Option is being exercised, or shall be entitled to receive from the
successor entity a new stock option of comparable value, or

 

(ii)                                  all outstanding Options shall be canceled as of
the effective date of any such merger, consolidation, liquidation or sale,
provided that each Participant shall have the right to exercise his Option
according to its terms during the period of twenty (20) days ending on the
day preceding the effective date of such merger, consolidation, liquidation or
sale; and in addition to the foregoing, the Committee may in its discretion
amend the terms of an Option by canceling some or all of the restrictions on
its exercise, to permit its exercise pursuant to this paragraph (ii) to a
greater extent than that permitted on its existing terms.

 

All adjustments to ISOs or
assumptions of ISOs by any successor corporation shall preserve their status as
ISOs.

 

After the effective date of such
merger, consolidation or sale, as the case may be, all Restricted Stock Units
shall be converted to Restricted Stock Units of the successor entity with
comparable value, unless such Units are distributed to the Participants in the
form of shares of Common Stock immediately preceding the effective date of such
merger, consolidation or sale.

 

Except as expressly provided to
the contrary in this Section 12, the issuance by the Company of shares of
stock of any class for cash or property or for services, either upon direct
sale or upon the exercise of rights or warrants, or upon conversion of shares
or obligations of the Company convertible into such shares or other securities,
shall not affect the number, class or price of shares of Common Stock then
subject to outstanding Options.

 

vi

 

13.                                 MISCELLANEOUS

 

(a) 
Nonassignability of Awards. 
No Awards shall be assignable or transferable by the Participant except
by will or the laws of descent and distribution. During the life of the
Participant, Awards shall be exercisable only by the Participant.

 

(b)  No Guarantee
of Employment.  Neither the
Plan nor any Award Agreement shall give an employee the right to continue in
the employment of the Company or a Subsidiary, or give the Company or a
Subsidiary the right to require an employee to continue in employment.

 

(c)  Tax
Withholding.  To the extent
required by law, the Company shall withhold or cause to be withheld income and
other taxes with respect to any income recognized by a Participant by reason of
the exercise or vesting of an Award, and as a condition to the receipt of any
Award the Participant shall agree that if the amount payable to him by the Company
and any Subsidiary in the ordinary course is insufficient to pay such taxes,
then he shall upon the request of the Company pay to the Company an amount
sufficient to satisfy its minimum tax withholding obligations.

 

Without limiting the foregoing,
the Committee may in its discretion permit any Participant’s minimum
withholding obligation to be paid in whole or in part in the form of shares of
Common Stock, by withholding from the shares to be issued or by accepting
delivery from the Participant of shares already owned by him. The fair market
value of the shares for such purposes shall be determined as set forth in
Section 5(b). If payment of withholding taxes is made in whole or in part
in shares of Common Stock, the Participant shall deliver to the Company
certificates registered in his name representing shares of Common Stock legally
and beneficially owned by him, fully vested and free of all liens, claims and
encumbrances of every kind, duly endorsed or accompanied by stock powers duly
endorsed by the record holder of the shares represented by such certificates.

 

(d)  Use of Proceeds.  The proceeds from the sale of shares pursuant
to Options shall constitute general funds of the Company.

 

14.                                 EFFECTIVE DATE, DURATION, AMENDMENT AND
TERMINATION OF PLAN

 

The Plan was originally
effective as of December 9, 1992 and was last amended by the Board on
November 3, 2004. The Committee may grant Awards under the Plan from time
to time until the close of business on November 2, 2014. The Board may at
any time amend the Plan, provided, however, that without approval of the
Company’s stockholders there shall be no: (i) increase in the total number
of shares of Common Stock reserved for issuance under the Plan, except by
operation of the provisions of Section 12; (ii) change in the class
of individuals eligible to receive Awards; (iii) reduction in the exercise
price of any ISO or NSO; (iv) extension of the latest date upon which any
ISO may be exercised; (v) material increase of the obligations of the Company
or rights of any Participant under the Plan or any Awards granted pursuant to
the Plan; (vi) expansion of the types of Awards available under the Plan;
(vii) material change in the method of determining fair market value; or
(viii) material extension of the term of the Plan. No amendment shall
adversely affect outstanding Awards without the consent of the Participant. The
Plan may be terminated at any time by action of the Board, but any such
termination will not terminate Awards then outstanding, without the consent of
the Participant.

 

vii

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