<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or
Rule 240.14a-12
ZENITH NATIONAL INSURANCE CORP.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
ZENITH NATIONAL INSURANCE CORP.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials:
---------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[LOGO]
Zenith National Insurance Corp.
21255 Califa Street
Woodland Hills, California 91367
Telephone (818) 713-1000
NOTICE OF ANNUAL MEETING
- --------------------------------------------------------------------------------
The Annual Meeting of Stockholders of Zenith National Insurance Corp.
("Zenith") will be held at the offices of Zenith, 21255 Califa Street, Woodland
Hills, California, on Thursday, May 18, 2000, at 9:00 a.m., for the following
purposes:
1. To elect a Board of eight (8) Directors.
2. To transact such other business as may properly come before the meeting
and any adjournments thereof.
Stockholders of record at the close of business on March 20, 2000, the
record date fixed by the Board of Directors for the Annual Meeting, are entitled
to notice of, and to vote at, such meeting.
By Order of the Board of Directors
John J. Tickner
SECRETARY
Woodland Hills, California
Dated: March 24, 2000
STOCKHOLDERS, WHETHER OR NOT THEY EXPECT TO ATTEND THE MEETING IN PERSON,
ARE REQUESTED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED FORM OF PROXY IN
THE ACCOMPANYING POSTPAID AND PRE-ADDRESSED ENVELOPE. THE PROXY IS REVOCABLE AT
ANY TIME PRIOR TO THE EXERCISE THEREOF BY WRITTEN NOTICE TO ZENITH, AND
STOCKHOLDERS WHO ARE PRESENT AT THE MEETING MAY WITHDRAW THEIR PROXIES AND VOTE
IN PERSON IF THEY SO DESIRE.
<PAGE>
ZENITH NATIONAL INSURANCE CORP.
21255 Califa Street,
Woodland Hills, California 91367
------------------------
PROXY STATEMENT
------------------------
VOTING
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Zenith National Insurance Corp. ("Zenith") of proxies to
be voted at the Annual Meeting of Stockholders of Zenith to be held on Thursday,
May 18, 2000, at 9:00 a.m., and at any adjournments thereof (the "Annual
Meeting"). Any proxy given pursuant to this solicitation may be revoked at any
time prior to its exercise by written notice to Zenith, and the persons
executing the same, if in attendance at the Annual Meeting, may vote in person
instead of by proxy. Unless authority therefor is withheld, all proxies will be
voted as provided therein. In addition to solicitation of proxies by mail,
officers and regular employees of Zenith and its subsidiaries, who will receive
no additional compensation therefor, may solicit proxies by telephone, telegram
or personal interview. The corporate subsidiaries of Zenith are Zenith Insurance
Company ("Zenith Insurance"), CalRehab Services, Inc., Perma-Bilt, a Nevada
Corporation, Zenith Development Corp., Zenith Insurance Management Services,
Inc., Zenith Risk Management, Inc., Zenith Star Insurance Company, and ZNAT
Insurance Company. The cost of this solicitation will be borne by Zenith. In
addition, Zenith will reimburse brokerage houses and other custodians, nominees
and fiduciaries for expenses incurred in forwarding solicitation materials to
stockholders.
The approximate date on which this Proxy Statement and accompanying form of
proxy are first being sent to stockholders is March 29, 2000.
Only stockholders of record at the close of business on March 20, 2000, the
record date for the Annual Meeting (the "Record Date"), are entitled to notice
of and to vote at such meeting. On such date, Zenith had outstanding
17,147,514 shares of common stock, $1.00 par value per share (the "Common
Stock"). Each share of Common Stock entitles the record holder to one vote on
all matters. With respect to the election of Directors only, however, every
stockholder may cumulate his votes with respect to candidates whose names have
been placed in nomination prior to the vote if, but only if, any stockholder has
given notice at the Annual Meeting prior to voting of his intention to cumulate
his votes. In the event there is cumulative voting for Directors, each
stockholder will be entitled to give one candidate the number of votes equal to
the number of Directors to be elected multiplied by the number of votes to which
the stockholder's shares are entitled, or to distribute his votes on the same
principle among as many candidates as such stockholder thinks fit. In the event
the election of Directors is to proceed with cumulative voting, the holder of
any proxy given pursuant to this solicitation will have the authority to
cumulate the votes to which shares covered by the proxy are entitled and to
distribute the votes among the candidates for election as the holder of the
proxy sees fit. The presence, in person or by proxy, of stockholders holding a
majority of the issued and outstanding shares of Common Stock entitled to vote
shall constitute a quorom. Election of Directors shall be decided by plurality
vote.
1
<PAGE>
The Board of Directors knows of no matters to come before the Annual Meeting
other than the matters referred to in this Proxy Statement. If, however, any
matters properly come before the meeting, it is the intention of each of the
persons named in the accompanying proxy to vote such proxies in accordance with
his best judgment thereon. Any such matter submitted for stockholder approval
requires the affirmative vote of the majority of shares present in person or
represented by proxy at the meeting and entitled to vote on the subject matter.
Abstentions and broker non-votes (except on matters for which brokers lack
discretionary authority to vote under New York Stock Exchange rules) will be
counted and will have the same effect as "no" votes.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table contains certain information at the Record Date as to:
(1) all persons who, to the knowledge of Zenith, were the beneficial owners of
more than 5% of the outstanding shares of Common Stock, (2) each of the
Executive Officers named in the Summary Compensation Table ("Named Executive
Officers"), (3) each of the Directors of Zenith, (4) the New Director Nominee
and (5) all Executive Officers (including Named Executive Officers), Directors
and the New Director Nominee as a group. The persons named hold sole voting and
investment power with respect to the shares shown opposite their respective
names, unless otherwise indicated. The information with respect to each person
specified is as supplied or confirmed by such person.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) OF CLASS
- ------------------------------------ ------------------------- --------
<S> <C> <C>
Fairfax Financial Holdings Limited(2)....................... 6,680,599 39.0%
95 Wellington St. West
Suite 800
Toronto, Ontario, Canada M5J 2N7
Royce Group(3).............................................. 1,432,700 8.4%
1414 Avenue of the Americas
New York, New York 10019
Harvey L. Silbert(4)(5)..................................... 1,053,640 6.1%
10100 Santa Monica Blvd.
Suite 2200
Los Angeles, CA 90067
Stanley R. Zax(4)(6)........................................ 1,048,564 5.8%
21255 Califa Street
Woodland Hills, CA 91367
Dimensional Fund Advisors Inc.(7)........................... 895,700 5.2%
1299 Ocean Ave., 11th Floor
Santa Monica, CA 90401
Fredricka Taubitz(8)........................................ 58,240 *
c/o 21255 Califa Street
Woodland Hills, CA 91367
Jack D. Miller(9)........................................... 50,194 *
21255 Califa St.
Woodland Hills, CA 91367
John J. Tickner(10)......................................... 37,106 *
21255 Califa Street
Woodland Hills, CA 91367
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) OF CLASS
- ------------------------------------ ------------------------- --------
<S> <C> <C>
Gerald Tsai, Jr.(4)......................................... 5,000 *
200 Park Ave.
New York, New York 10166
Max M. Kampelman(4)......................................... 4,992 *
1001 Pennsylvania Avenue N.W.
Washington D.C. 20004
William Steele Sessions(4)(11).............................. 1,461 *
Weston Centre
112 East Pecan St.
San Antonio, TX 78205
James P. Ross(12)........................................... 152 *
c/o 21255 Califa Street
Woodland Hills, CA 91367
Robert J. Miller(4)......................................... 0 *
3773 Howard Hughes Parkway
Third Floor South
Las Vegas, NV 89109
Leon E. Panetta(13)......................................... 0 *
P.O. Box 42
Carmel Valley, CA 93924
Michael Wm. Zavis(4)........................................ 0 *
525 West Monroe St. Suite 1600
Chicago, IL 60661
All Executive Officers (including Named Executive Officers)
and
Directors as a group (11 persons)(14)..................... 2,259,349 12.5%
</TABLE>
- --------------------------
* Less than 1%
(1) Subject to applicable community property and similar statutes.
(2) On July 6, 1999, a statement on Schedule 13D was filed with the United
States Securities and Exchange Commission by Fairfax Financial Holdings
Limited ("Fairfax"), V. Prem Watsa, The Sixty Two Investment Company Limited
("Sixty Two"), 810679 Ontario Limited ("810679") and Hamblin Watsa
Investment Counsel Ltd. ("Hamblin"). The information in the table is based
on such filing and other information supplied by Fairfax. The filing and
other information indicate that the 6,680,599 shares of Common Stock consist
of 3,287,223 shares held by TIG Insurance Company ("TIG Insurance"),
3,287,222 shares held by United States Fire Insurance Company ("U.S. Fire"),
20,000 shares held by The North River Insurance Company ("North River") and
86,154 shares held by Hamblin. Of the 86,154 shares held by Hamblin, an
investment management company, 21,954 shares are owned by clients outside of
the Fairfax group, and 64,200 are owned by Odyssey America Reinsurance
Corporation, formerly named TIG Reinsurance Company ("Odyssey"). TIG
Insurance, U.S. Fire, North River and Hamblin are each either a direct or
indirect wholly-owned subsidiary of Fairfax. Mr. Watsa, directly and
indirectly through Sixty Two and 810679, owns the controlling equity voting
interest of Fairfax. Fairfax, Mr. Watsa, Sixty Two and 810679 all share
voting and dispositive power with respect to the 6,680,599 shares. TIG
Insurance, U.S. Fire and North River each shares voting and dispositive
power with respect to the shares owned by them. Hamblin, through investment
advisory agreements with its clients outside of the Fairfax group, as well
as with Odyssey, may share voting and dispositive power with respect to the
86,154 shares held by Hamblin. Odyssey shares voting and dispositive power
with respect to the 64,200 shares owned by it. Mr. Watsa, Sixty Two, 810679
and Hamblin disclaim beneficial ownership of, or any pecuniary interest in,
the 6,680,599 shares.
(3) On February 9, 2000, a statement on Schedule 13G/A was filed with the United
States Securities and Exchange Commission by a group consisting of Royce &
Associates, Inc. ("Royce"), Royce Management Company ("RMC"), and Charles M.
Royce, amending the Royce group's statement on Schedule 13G filed on
February 17,
3
<PAGE>
1999. The information in the table is based on such filings. The filings
indicate that Royce beneficially owns 1,398,800 shares, as to which it holds
sole voting and dispositive power; that RMC beneficially owns 33,900 shares,
as to which it holds sole voting and dispositive power; and that Charles M.
Royce may be deemed to be a controlling person of Royce and RMC, and as such
may be deemed to beneficially own the shares owned by Royce and RMC. Charles
M. Royce holds no shares outside of Royce and RMC and disclaims beneficial
ownership of the shares held by Royce and RMC.
(4) Director of Zenith.
(5) Number of shares shown includes 173,551 shares held by Mr. Silbert as
trustee of certain family trusts, as to which shares Mr. Silbert disclaims
beneficial ownership. Number of shares shown also includes 880,089 shares
held by The Harvey L. and Lillian Silbert Family Trust, a revocable trust,
of which Mr. Silbert is a trustee.
(6) Chief Executive Officer of Zenith. Number of shares shown includes 1,030
shares owned by Mr. Zax as custodian for his adult children, as to which
shares Mr. Zax disclaims beneficial ownership, and 800,000 shares, as to
which options are or will become exercisable within sixty days after the
Record Date.
(7) On February 3, 2000, an information statement on Schedule 13G was filed with
the United States Securities and Exchange Commission by Dimensional Fund
Advisors Inc. ("Dimensional"). The information in the table is based on such
filing. The filing indicates that Dimensional is an investment advisor
registered under Section 203 of the Investment Advisors Act of 1940, that
Dimensional furnishes investment advice to four investment companies
registered under the Investment Company Act of 1940, and that Dimensional
serves as investment manager to certain other commingled group trusts and
separate accounts. As investment advisor or manager, Dimensional holds sole
voting and dispositive power with respect to the 895,700 shares. The
investment companies, trusts, and accounts own the 895,700 shares and
Dimensional disclaims any beneficial ownership of them.
(8) Ms. Taubitz resigned as an Executive Officer of Zenith effective March 1,
2000. Number of shares shown includes 6,740 shares allocated to her account
in The Zenith 401(k) Plan and 45,000 shares as to which options are or will
become exercisable within sixty days after the Record Date.
(9) Executive Officer of Zenith. Number of shares shown consists of 194 shares
allocated to such Executive Officer's account in The Zenith 401(k) Plan and
50,000 shares as to which options are or will become exercisable within
sixty days after the Record Date.
(10) Executive Officer of Zenith. Number of shares shown consists of
2,106 shares allocated to such Executive Officer's account in The Zenith
401(k) Plan and 35,000 shares as to which options are or will become
exercisable within sixty days after the Record Date.
(11) Shares shown are held in Mr. Sessions' Simplified Employee Pension --
Individual Retirement Account.
(12) Executive Officer for part of last fiscal year, but not as of the end of
such year.
(13) New Director Nominee of Zenith.
(14) Number of shares shown includes 930,000 shares as to which options are or
will become exercisable within sixty days after the Record Date.
4
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the regulations of the Securities and Exchange Commission
(the "Commission") thereunder require Zenith's Executive Officers and Directors,
and persons who own more than ten percent of a registered class of Zenith's
equity securities, to file reports of ownership and changes in ownership with
the Commission and the New York Stock Exchange and to furnish Zenith with copies
of all such forms they file.
Based solely on its review of the copies of such forms received by it and
written representations from certain reporting persons, Zenith believes that,
during the year ended December 31, 1999, all filing requirements applicable to
its Executive Officers, Directors, and 10% stockholders were complied with,
except that due to inadvertent error, Fairfax Financial Holdings Limited
("Fairfax"), did not file a Form 4 reporting the purchase of 10,000 shares of
Common Stock in December 1999 by a wholly owned subsidiary. Fairfax subsequently
filed a Form 5 reporting the purchase.
ELECTION OF DIRECTORS
It is the intention of the persons named in the enclosed proxy, unless
otherwise specifically instructed, to vote the proxies received by them for the
election of the nominees listed in the table below as Directors of Zenith. In
the event that there should be cumulative voting in the election of Directors,
as set forth in this Proxy Statement under "Voting" above, it is the intention
of such persons to distribute the votes represented by each proxy among such
nominees in such proportion as they see fit, unless otherwise specifically
instructed.
All nominees have consented to being named herein and have indicated their
intention to serve if elected. In the unanticipated event that any of the
nominees becomes unable to serve as a Director, the proxies will be voted for a
substitute nominee in accordance with the best judgment of the person or persons
voting them.
A Director of Zenith serves until the next Annual Meeting of Stockholders
and until his successor is elected and qualified.
5
<PAGE>
The nominees for Director listed below were designated by the Board of
Directors of Zenith. The information with respect to each nominee is as supplied
or confirmed by such nominee.
<TABLE>
<CAPTION>
SERVED AS PRINCIPAL OCCUPATIONS AND OTHER PUBLICLY HELD
DIRECTOR POSITIONS AND OFFICES HELD WITH EMPLOYMENT DURING PAST CORPORATIONS IN WHICH
NAME AGE SINCE ZENITH FIVE YEARS DIRECTORSHIPS HELD
---- --- --------- ------------------------------- ------------------------- ----------------------
<S> <C> <C> <C> <C> <C>
Max M. Kampelman 79 February Director of Zenith and Zenith Attorney, Of Counsel, None
1989 Insurance since March 1991, and
Partner, January 1989 to
March 1991, Fried, Frank,
Harris, Shriver &
Jacobson; Counselor of
the Department of State
and Head of the U.S.
Delegation to
Negotiations on Nuclear
and Space Arms with the
Soviet Union from January
1985 to January 1989
Robert J. Miller 54 February Director of Zenith and Zenith Attorney, Senior Partner, Newmont Mining
1999 Insurance; Member of Audit Jones Vargas since Corporation; Paging
Committee January 1999; Governor of Network, Inc.
Nevada for the ten years
prior to January 1999
Leon E. Panetta 61 Founder and Director, None
The Leon & Sylvia Panetta
Institute for Public
Policy since
December 1998; White
House Chief of Staff,
July 1994 to
January 1997; Director,
White House Office of
Management and Budget,
January 1993 to
July 1994; U.S.
Representative,
January 1977 to
January 1993.
William Steele 69 September Director of Zenith and Zenith Attorney, Sessions & The Kroll-O'Gara
Sessions 1993 Insurance Sessions, L.C. since Company
March 1995; Security
Consultant since July
1993; Director, Federal
Bureau of Investigation
from 1987 to 1993
Harvey L. 87 January Director of Zenith and Zenith Attorney, Of Counsel, None
Silbert(1) 1978 Insurance; Member of Loeb & Loeb LLP since
Performance Bonus Committee March 1991; Of Counsel,
Wyman, Bautzer, Kuchel &
Silbert for more than
five years prior to March
1991; management of
personal investments for
more than the past five
years
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
SERVED AS PRINCIPAL OCCUPATIONS AND OTHER PUBLICLY HELD
DIRECTOR POSITIONS AND OFFICES HELD WITH EMPLOYMENT DURING PAST CORPORATIONS IN WHICH
NAME AGE SINCE ZENITH FIVE YEARS DIRECTORSHIPS HELD
---- --- --------- ------------------------------- ------------------------- ----------------------
<S> <C> <C> <C> <C> <C>
Gerald Tsai, Jr. 71 December Director of Zenith and Zenith Management of private Saks Incorporated;
1991 Insurance; Chairman of investments since January Rite Aid Corporation;
Performance Bonus Committee; 1989; Chairman, Sequa Corporation;
Member of Audit Committee President, and Chief Triarc Companies,
Executive Officer of Inc.;
Delta Life Corporation, United Rentals, Inc.
February 1993 to October
1997; Chairman and CEO,
Primerica Corp., February
1987 to December 1988
Michael Wm. Zavis 62 September Director of Zenith and Zenith Attorney, Co-Managing None
1998 Insurance; Chairman of Audit Partner, Katten, Muchin &
Committee; Member of Zavis for more than the
Performance Bonus Committee past five years
Stanley R. Zax 62 July Chairman of the Board and President of Zenith and Zenith None
1977 Insurance for more than the past five years; Chairman of
the Board of CalFarm Life Insurance Company for more than
five years prior to December 1995; Chairman of the Board
and President of CalFarm Insurance Company ("CalFarm") for
more than five years prior to January 1995; and Chairman
of the Executive Committee of the Board of Directors of
CalFarm from January 1995 to March 1999 (2)
</TABLE>
- ------------------------------
(1) Mr. Silbert is of counsel to the law firm of Loeb & Loeb LLP, which
performed certain legal services for Zenith in 1999.
(2) Zenith Insurance is a wholly-owned subsidiary of Zenith, as were CalFarm
Life Insurance Company and CalFarm, until their sales in December 1995 and
March 1999, respectively.
7
<PAGE>
The Board of Directors communicated frequently during the year ended
December 31, 1999, held three formal meetings and also took action by unanimous
written consent. Zenith's Board of Directors has a standing Audit Committee and
a Performance Bonus Committee but has no nominating committee or any committee
performing similar functions. On February 24, 2000, Messrs. Miller, Tsai, and
Zavis (Chairman) were appointed to the Audit Committee. Previous thereto, the
sole member and Chairman of the Audit Committee was Mr. Zavis. The functions of
the Audit Committee are to recommend to the Board of Directors retention or
change of Zenith's independent auditors; to consider the range of audit and
non-audit fees; to review the independence of the auditors; to meet with the
auditors and Zenith's internal audit personnel to discuss and review the results
of their respective examinations and audit plans for the ensuing year; and to
review the adequacy of Zenith's system of internal accounting controls and like
matters. The Audit Committee is also authorized to review and discuss other
matters as it deems appropriate. During 1999, the Audit Committee communicated
frequently with Zenith's financial and accounting and internal audit department
personnel and independent auditors, including at seven formal meetings. The
Performance Bonus Committee, consisting of Messrs. Tsai (Chairman), Silbert and
Zavis, is responsible for performance-based compensation plans for Executive
Officers, namely, the Executive Officer Bonus Plan and the 1996 Employee Stock
Option Plan as it relates to grants thereunder to Executive Officers. The Board
of Directors retains responsibility for all other compensation matters. The
Performance Bonus Committee did not hold any formal meetings in 1999, but took
action by unanimous written consent. Each Director, except Messrs. Kampelman and
Silbert, who each missed one meeting of the Board of Directors, attended all of
the meetings of the Board of Directors and of any committees thereof on which
such Director served.
DIRECTORS' COMPENSATION
Zenith pays each Director (other than Mr. Zax, who receives no additional
compensation therefor) a fee of $50,000 per annum for serving as a member of the
Board of Directors. Each of Messrs. Miller, Tsai and Zavis also receives a fee
of $25,000 per annum for serving as a member of Zenith's Audit Committee.
EXECUTIVE COMPENSATION
The following table sets forth information regarding the compensation paid
during the 1997, 1998 and 1999 fiscal years to the Named Executive Officers. The
Named Executive Officers are Zenith's Chief Executive Officer, its three other
most highly compensated Executive Officers serving as of December 31, 1999 and
one other individual, who served as an Executive Officer during a portion of
1999, but not as of December 31, 1999. Such individual would have been one of
Zenith's four most highly compensated Executive Officers (other than the Chief
Executive Officer) as of December 31, 1999 if he had been serving as an
Executive Officer on such date and is included in the table pursuant to
regulations of the Commission.
8
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
--------------
AWARDS
ANNUAL COMPENSATION --------------
---------------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
COMPENSATION OPTIONS/ COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($)(1) ($) SARS (#) ($)(6)
- --------------------------------- -------- ---------- ------------ ------------ -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
STANLEY R. ZAX 1999 1,023,611 0 0 0 33,837
Chairman of the Board and 1998 1,023,612 0 0 0 36,966
President of Zenith and 1997 1,025,248 0 0 0 36,966
Zenith Insurance
JACK D. MILLER(2) 1999 415,600 0 0 0 5,306
Executive Vice President of 1998 415,600 0 0 0 2,880
Zenith Insurance 1997 -- -- -- -- --
FREDRICKA TAUBITZ(3) 1999 406,600 250,000 0 0 8,671
Executive Vice President and 1998 406,600 0 0 0 8,960
Chief Financial Officer of Zenith 1997 391,600 0 0 25,000 8,926
and Zenith Insurance
JOHN J. TICKNER 1999 268,986 250,000 0 0 20,812
Senior Vice President and 1998 269,268 0 0 0 21,025
Secretary of Zenith and Senior 1997 252,939 0 0 25,000 20,991
Vice
President, General Counsel and
Secretary of Zenith Insurance
JAMES P. ROSS(4) 1999 182,504 0 0 0 29,557
Senior Vice President of 1998 283,717 0 0 0 9,111
Zenith and Zenith Insurance 1997 283,717 0 15,588(5) 0 10,343
</TABLE>
- ------------------------------
(1) Amounts shown were discretionary bonuses and not determined and paid under
Zenith's Executive Officer Bonus Plan.
(2) Mr. Miller was designated an Executive Officer on February 24, 1998.
(3) Effective March 1, 2000, Ms. Taubitz resigned her positions with Zenith and
Zenith Insurance. As a result of a Change in Control that occurred in
October 1999, under the terms of Ms. Taubitz's employment agreement, her
resignation entitled her to receive certain severance payments, including a
cash lump sum payment in the aggregate amount of $1,677,491. Ms. Taubitz's
employment agreement and the severance payment provisions therein are
discussed under "Employment Agreements and Termination of Employment and
Change in Control Arrangements" below.
(4) Executive Officer of Zenith for part of fiscal year 1999, but not as of the
end of such year.
(5) Amount shown represents reimbursement of certain income tax liabilities.
(6) The following amounts are included in the above table: (a) Zenith's matching
contributions made in fiscal year 1999 to The Zenith 401(k) Plan, as
follows: Stanley R. Zax, none; Jack D. Miller, $3,200; Fredricka Taubitz,
$3,200; John J. Tickner, $3,200 and James P. Ross, none; (b) the dollar
value of insurance premiums paid in fiscal year 1999 by, or on behalf of,
Zenith with respect to term life insurance for the benefit of the Named
Executive Officer, as follows: Stanley R. Zax, $10,911; Jack D. Miller,
$2,106; Fredricka Taubitz, $5,471; John J. Tickner, $4,287; and
James P. Ross, $1,691; and (c) the dollar value of the benefit to the Named
Executive Officer of premiums paid by, or on behalf of, Zenith during fiscal
year 1999, with respect to certain split dollar life insurance policies, as
follows: Stanley R. Zax, $22,926; Jack D. Miller, none; Fredricka Taubitz,
none; John J. Tickner, $13,325; and James P. Ross, none. When Mr. Ross
terminated his employment, two split dollar life insurance policies on his
life in the total face amount of $75,000 were surrendered and Mr. Ross
received $1,338 after the repayment to Zenith of the premiums it had paid on
such policies. With respect to a third split dollar life insurance policy on
Mr. Ross' life in the face amount of $425,000, Zenith borrowed the sum of
the aggregate of premiums paid by it on the policy and assigned the policy
to Mr. Ross subject to the loan. At the time of such assignment, the cash
value of the policy net of Zenith's loan was $26,528. This sum plus the
$1,338 received by Mr. Ross on the two surrendered policies are also
included in the amount shown for Mr. Ross.
9
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
No options or SARs were granted to any of the Named Executive Officers in
fiscal year 1999.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS/SARS AT FY-END (#) OPTIONS/SARS AT FY-END ($)(1)
ACQUIRED ON VALUE --------------------------- -----------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------- ------------ ------------ ----------- ------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Stanley R. Zax -- -- 600,000 400,000 0 0
Jack D. Miller -- -- 50,000 50,000 0 0
Fredricka Taubitz -- -- 32,500 12,500 0 0
John J. Tickner -- -- 35,000 15,000 0 0
James P. Ross(2) 37,500 33,000 0 0 0 0
</TABLE>
- ------------------------
(1) Based on the $20.56250 closing price of the Common Stock on the New York
Stock Exchange on December 31, 1999.
(2) Executive Officer for part of fiscal year 1999, but not as of the end of
such year.
EMPLOYMENT AGREEMENTS AND TERMINATION OF EMPLOYMENT
AND CHANGE IN CONTROL ARRANGEMENTS
Effective December 11, 1997, Zenith entered into an amended and restated
employment agreement with Mr. Zax, which extended the expiration date of his
employment agreement from December 31, 1998 to December 31, 2002. The amended
and restated employment agreement provides for an annual base compensation plus
an annual bonus to be determined under Zenith's Executive Officer Bonus Plan.
Under the agreement, Mr. Zax's base compensation is continued at $1,000,000,
subject to such increases as the Board of Directors may determine from time to
time. Upon Mr. Zax's death, Zenith will continue to pay either his wife,
children or estate his base compensation and annual bonus for a period of twelve
months. If Mr. Zax's employment is terminated for disability, he will receive
his base compensation and annual bonus for a period of six months. If Mr. Zax's
employment is terminated for breach by him of his employment agreement, he will
receive his base compensation through the end of the month in which the
termination occurs. If his employment is terminated for any reason other than
for breach of his employment agreement, death, or disability, Zenith will pay
Mr. Zax his base compensation and annual bonus through the term of his
employment agreement. Upon a Change in Control (as defined in the employment
agreement) of Zenith, all stock options and stock appreciation rights granted to
Mr. Zax, to the extent not exercisable at such time, become immediately
exercisable. In addition, if Mr. Zax's employment is terminated subsequent to
any Change in Control, either by Mr. Zax within 180 days of the Change in
Control or by Zenith for any reason other than disability or breach of his
employment agreement, Mr. Zax is entitled to receive Severance Payments (as
defined below). Mr. Zax's base compensation is currently $1,000,000.
Zenith Insurance entered into an amendment dated as of March 1, 2000 to
Mr. Miller's employment agreement extending the expiration date of his
employment agreement from October 31, 2002 to October 31, 2004 and establishing
future annual base compensation. The employment agreement, as amended, provides
for: (1) annual base compensation of $453,200, $494,400, $535,600, $618,000 and
10
<PAGE>
$700,400, effective on March 1 of 2000, 2001, 2002, 2003 and 2004, respectively,
subject to such increases as the Board of Directors of Zenith Insurance may
determine from time to time; (2) annual discretionary bonuses; and (3) certain
additional benefits. Mr. Miller's original employment agreement was entered into
prior to his becoming an Executive Officer in 1998, but he is eligible for
annual bonuses determined under Zenith's Executive Officer Bonus Plan.
Mr. Miller's base compensation is currently $453,200.
At the March 1, 2000 effective date of her resignation as Executive Vice
President and Chief Financial Officer of Zenith and Zenith Insurance, Ms.
Taubitz and Zenith were parties to an amended and restated employment agreement
that was effective December 31, 1997. That restated and amended employment
agreement had extended the expiration date of her employment agreement from
October 1, 1998 to December 31, 2002. The amended and restated employment
agreement provided for annual base compensation, an annual bonus to be
determined under Zenith's Executive Officer Bonus Plan and certain additional
benefits. Ms. Taubitz's base compensation was $391,000 at the time of her
resignation.
Zenith entered into an amendment dated as of March 1, 2000 to Mr. Tickner's
employment agreement extending the expiration date of his employment agreement
from March 1, 2001 to March 1, 2003 and establishing future annual base
compensation. The employment agreement, as amended, provides for: (1) annual
base compensation of $311,163, $349,376 and $387,589, effective on March 1 of
2000, 2001 and 2002, respectively, subject to such increases as the Board of
Directors may determine from time to time; (2) annual bonuses to be determined
under Zenith's Executive Officer Bonus Plan; and (3) certain additional
benefits. Mr. Tickner's base compensation is currently $311,163.
Zenith's employment agreements with Mr. Miller, Ms. Taubitz and Mr. Tickner
provide that if the executive's employment is terminated by Zenith other than
for cause or disability, the executive is entitled to Severance Payments. Also,
each of Ms. Taubitz, Mr. Miller and Mr. Tickner may terminate her or his
employment with Zenith and receive Severance Payments should (a) she or he be
prohibited or restricted in the performance of her or his duties, (b) any
payment due her or him under her or his agreement remain unpaid for more than 60
days, or (c) she or he give written notice to Zenith of termination of her or
his employment agreement within 180 days following a Change in Control (as
defined in the employment agreements) of Zenith. In addition to the foregoing
reasons, Ms. Taubitz and Mr. Tickner may terminate her or his Employment
Agreement and receive Severance Payments as follows: (1) in the case of
Ms. Taubitz, should Mr. Zax cease to be the full-time Chairman of the Board and
President of Zenith for any reason, other than death or disability and (2) in
the case of Mr. Tickner (as provided in the March 1, 2000 amendment to his
employment agreement), should Mr. Zax cease to be the full-time Chairman of the
Board and President of Zenith for any reason, other than death or disability or
his retirement on or after December 31, 2002. This basis for Mr. Tickner's
terminating his employment is of no force and effect after December 31, 2002.
For purposes of the foregoing, "Severance Payments" include the following
benefits: (1) in the case of Mr. Tickner, all salary payments that would have
been payable to him for the greater of (a) the remaining term of the employment
agreement or (b) one year, plus a pro rata portion of any bonus that would have
been payable to him with respect to the year of termination; (2) in the case of
Mr. Miller, all salary payments that would have been payable to him for the
greater of (a) the remaining term of the employment agreement or (b) two years,
plus any bonus that would otherwise have been payable to him for such period;
(3) in the case of Mr. Zax and Ms. Taubitz, a cash lump sum payment equal to the
greater of (a) twice the sum of the executive's then current base compensation
and the highest annual bonus paid or payable during the three consecutive years
immediately preceding termination of employment or (b) the actuarial equivalent
of the base compensation and annual bonuses that would have been payable to the
11
<PAGE>
executive under the remaining term of the employment agreement;
(4) continuation of life, disability, dental, accident and group health
insurance benefits, plus an additional amount necessary to reimburse the
executive for any taxes attributable solely to the executive's receipt of such
benefits; (5) in the case of Ms. Taubitz and Mr. Tickner, vesting of all stock
option and similar rights; and (6) an additional payment, if necessary, to
assure that none of the above benefits are subject to net reduction due to the
imposition of excise taxes under section 4999 of the Internal Revenue Code of
1986, as amended.
The acquisition by Fairfax of shares of Common Stock in October 1999
constituted a Change in Control under Ms. Taubitz's employment agreement.
Effective March 1, 2000, Ms. Taubitz tendered her resignation as Executive Vice
President and Chief Financial Officer of Zenith and Zenith Insurance. As a
result, pursuant to her employment agreement, Ms. Taubitz became entitled to
receive Severance Payments, including a cash lump sum payment in the aggregate
amount of $1,677,491. Messrs. Zax, Miller and Tickner waived rights that would
otherwise have arisen under the Change in Control provisions of their employment
agreements as a result of the acquisition by Fairfax of shares of Common Stock
in October 1999.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In 1999, all decisions on Executive Officer compensation, other than
decisions related to performance-based compensation plans, were made by the
Board of Directors. Mr. Zax, Chairman of the Board and President, is a member of
the Board of Directors, and except with respect to his own compensation,
participated in the Board of Directors' deliberations concerning Executive
Officer compensation.
The Performance Bonus Committee, consisting of Messrs. Silbert, Tsai and
Zavis, determines matters relating to performance-based compensation plans for
Executive Officers. Mr. Silbert is of counsel to the law firm of Loeb & Loeb
LLP, which performed certain legal services for Zenith in 1999.
BOARD OF DIRECTORS' REPORT ON EXECUTIVE COMPENSATION; PERFORMANCE
BONUS COMMITTEE REPORT ON PERFORMANCE BASED
COMPENSATION PLANS FOR EXECUTIVE OFFICERS
Zenith's entire Board of Directors made determinations with respect to
compensation of Executive Officers in 1999, except with respect to Mr. Zax's
compensation, which is established in Board of Directors' actions from which
Mr. Zax excuses himself and in which he does not participate, and except with
respect to matters related to performance-based compensation plans for Executive
Officers. The Performance Bonus Committee made determinations under
performance-based compensation plans for Executive Officers. The Board of
Directors' report on Executive Compensation and the Performance Bonus
Committee's report on its determinations shall not be deemed to be incorporated
by reference through any general statement incorporating by reference this proxy
statement into any filings under the Securities Act of 1933 or under the
Securities Exchange Act of 1934 and shall not otherwise be deemed to be filed
under such Acts.
The Board of Directors' report on Executive Compensation follows:
EXECUTIVE OFFICERS
The level of compensation for Executive Officers of Zenith is intended to be
competitive (that is, "attractive") and to provide appropriate incentives.
Executive Officers of Zenith are generally compensated through salary, grants of
stock options, and bonuses under the Executive Officer Bonus Plan.
12
<PAGE>
The Executive Officer Bonus Plan, approved by the stockholders of Zenith at the
1994 Annual Meeting, is administered by the Performance Bonus Committee. The
Performance Bonus Committee also grants stock options to Executive Officers
under Zenith's 1996 Employee Stock Option Plan. The report of the Performance
Bonus Committee follows this report.
The level of an Executive Officer's base compensation is generally based on
a combination of (1) the performance of Zenith, (2) the performance of the
insurance subsidiary, if any, to which the Executive Officer is principally
assigned, and (3) a subjective and qualitative evaluation of the personal
contribution made by the Executive Officer to Zenith. Success in these areas
does not translate mechanically into compensation levels; the manner in which
these factors are taken into account is discretionary with the Board of
Directors and is not based on any formulaic weighting.
The performance of Zenith is generally measured by the combined ratio of its
property and casualty insurance operations and by its overall profitability.
Zenith strives for and has achieved long term average combined ratios that are
about 100%. Zenith also strives for combined ratios that compare favorably in
both the short- and long-term with insurers primarily engaged in writing
workers' compensation insurance. In addition, Zenith endeavors to have loss
ratios that are among the lowest for the industry in any rolling previous five
year period. The performance of the Zenith insurance subsidiaries is generally
measured by their combined ratios and profitability, as applicable.
With respect to the subjective and qualitative evaluation of an Executive
Officer's personal contribution to the business of Zenith, a variety of factors
are taken into account. These factors vary and include, but are not limited to,
the manner in which the Executive Officer favorably affects Zenith's combined
ratio and profitability. Equally, if not more, important is the manner in which
the Executive Officer performs in Zenith's environment, which fosters an
entrepreneurial spirit, teamwork, an understanding and use of technology, and a
commitment to education. Zenith believes an entrepreneurial spirit maximizes
profits, promotes sound execution of good business fundamentals, and maintains a
pool of executive talent. Teamwork is crucial to the effective and efficient
implementation of Zenith's goals. Understanding, adopting and using technology
are necessary for Zenith to compete effectively and efficiently. A commitment to
education means a dedication to lifelong learning and training for oneself and
creating conditions so that the workforce is similarly dedicated. Such
dedication is critical to Zenith's ability to address changes in market
conditions and use such changes to its competitive advantage. In such an
environment, proactive and innovative approaches are strongly encouraged and
rewarded.
On the operational side, activities that demonstrate an opportunistic
outlook, anticipation of changing business conditions and the development of
postures to take advantage of opportunities to increase short-and long-term
profits are rewarded. On the administrative side, efficiency, competence, strong
compliance efforts, anticipation and avoidance of problems, as well as
innovation, are rewarded.
Certain of the Executive Officers are employed under employment agreements
that provide for minimum base compensation and annual bonuses. Determinations as
to salary increases for these Executive Officers, as well as those without
employment agreements, are discretionary and are not made on the basis of a
formulaic weighting of the factors described above. Bonuses are generally
determined for Executive Officers in accordance with the Executive Officer Bonus
Plan.
In 1999, the combined ratio of Zenith's property and casualty operations was
higher than the combined ratio for the industry as a whole. Given this
performance and taking into account the subjective and qualitative evaluations
of individual Executive Officers, the level of each Executive Officer's base
13
<PAGE>
compensation was set accordingly. Please see the separate report of the
Performance Bonus Committee for a discussion regarding the determination of
annual bonuses for Executive Officers for 1999. However, the Board of Directors
determined that discretionary bonuses should be paid to Ms. Taubitz and
Mr. Tickner for Fiscal Year 1999 outside of the Executive Officer Bonus Plan
because of their efforts in connection with the sale of CalFarm Insurance
Company.
STANLEY R. ZAX, CHIEF EXECUTIVE OFFICER
Mr. Zax is never present when the Board of Directors deliberates with
respect to his compensation and, accordingly, does not participate in Board of
Directors' decisions on his own compensation.
Mr. Zax's base salary for 1999 was specified in an amended and restated
employment agreement executed in 1997. Under the employment agreement, which
ends on December 31, 2002, increases in base compensation are at the discretion
of the Board of Directors and are not based on a formulaic weighting of factors.
In determining whether to grant any salary increase, the same performance
criteria that are applied to Executive Officers in general are applied to Mr.
Zax. Also, as with Executive Officers generally, bonuses to Mr. Zax are
determined in accordance with the Executive Officer Bonus Plan.
Taking the objective and subjective criteria described above into account,
the Board of Directors was generally satisfied with Mr. Zax's performance during
1999, but was particularly pleased with his handling of the sale of CalFarm
Insurance Company. However, the Board of Directors continues to be concerned, as
does Mr. Zax, with certain aspects of Zenith's operations that have led to
unsatisfactory results. Mr. Zax has initiated steps to address these concerns.
The Board of Directors agrees with such steps and believes Mr. Zax's base
compensation should continue at its present level, with incentives and rewards
to be earned under the Executive Officer Bonus Plan.
SECTION 162(m) POLICY
Section 162(m) of the Internal Revenue Code of 1986, as amended, generally
limits the Federal income tax deduction that a public corporation may claim for
annual compensation paid to certain executive officers. The limitation with
respect to each affected Executive Officer is $1,000,000 per year. However, the
limitation does not apply to compensation which is performance-based, earned
under a plan approved by the corporation's stockholders and which satisfies
certain other conditions set forth in Section 162(m) and the regulations
thereunder. Stock option grants awarded to Executive Officers under Zenith's
1996 Employee Stock Option Plan and bonuses payable under the Executive Officer
Bonus Plan are intended to comply with Section 162(m). Accordingly, neither
income accruing to Executive Officers upon exercise of stock options nor the
amount of any bonus payment made to Executive Officers under the Executive
Officer Bonus Plan should be subject to the $1,000,000 limit on deductibility.
The Board of Directors has determined that it will pay Mr. Zax's annual salary
and any discretionary bonus that may be determined and paid outside of the
Executive Officer Bonus Plan even though any portion of the total of the annual
salary and any discretionary bonus over $1,000,000 would not be deductible by
Zenith.
Stanley R. Zax, Chairman of the Board
<TABLE>
<S> <C>
Max M. Kampelman Gerald Tsai, Jr.
Robert J. Miller Michael Wm. Zavis
William Steele Sessions
Harvey L. Silbert
</TABLE>
14
<PAGE>
The Performance Bonus Committee's report of its determinations of
performance-based compensation for Executive Officers follows:
The Performance Bonus Committee is responsible for administering the
Executive Officer Bonus Plan and for granting stock options to Executive
Officers under the 1996 Employee Stock Option Plan. In so doing, the Performance
Bonus Committee implements and reinforces the compensation philosophy of the
Board of Directors, as set out in the Board of Directors' Report on Executive
Compensation.
EXECUTIVE OFFICER BONUS PLAN
The Executive Officer Bonus Plan was approved by the stockholders at the
1994 Annual Meeting as a performance-based compensation plan. It provides for
bonuses to Executive Officers based upon attainment by Zenith in any fiscal year
of an objectively measured performance goal, namely a combined ratio that is
below the industry's combined ratio. The Executive Officer Bonus Plan provides
for bonuses to Executive Officers up to an amount equal to:
100% of his or her salary at the beginning of the fiscal year if the Company
Combined Ratio for such fiscal year is at least three percentage points, but
less than five percentage points, below the Industry Combined Ratio or
150% of his or her salary at the beginning of the fiscal year if the Company
Combined Ratio for such fiscal year is at least five percentage points below
the Industry Combined Ratio;
provided, however, in either instance, the Performance Bonus Committee may, in
its sole discretion, on a case by case basis, reduce such bonus by any amount.
In 1999, Zenith's combined ratio was 122.0%; the industry's 1999 combined
ratio, as estimated and reported by A.M. Best Company, was 107.5%. Accordingly,
the objective performance goal under the Executive Officer Bonus Plan was not
met and no bonuses thereunder are payable to Executive Officers with respect to
fiscal year 1999.
STOCK OPTION GRANTS
EXECUTIVE OFFICERS
From time to time the Performance Bonus Committee grants options to
Executive Officers to purchase Common Stock. Options are considered a part of
compensation to recognize an Executive Officer's contribution and to reinforce
that Executive Officer's long term commitment to the success of Zenith. The
Performance Bonus Committee's determination to grant options to an Executive
Officer is based on the recommendation of the Chairman of the Board, subjective
measures and prior grants to that Executive Officer. Beyond these general
considerations, there is no particular formula governing the number of shares
awarded.
In 1999, none of the Named Executive Officers were granted options to
purchase Common Stock under the 1996 Employee Stock Option Plan.
Gerald Tsai, Jr., Chairman
Harvey L. Silbert
Michael Wm. Zavis
15
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The Stock Price Performance Graph below compares the cumulative total
returns of the Common Stock ("ZNT"), the Standard and Poor's 500 Stock Index
("S&P 500") and the Standard and Poor's 500 Property-Casualty Insurance Index
("S&P PC") for a five year period. Stock price performance is based on
historical results and is not necessarily indicative of future stock price
performance. The following graph assumes $100 was invested at the close of
trading on the last trading day preceding the first day of the fifth preceding
fiscal year in the Common Stock, the S&P 500, and the S&P PC. The calculation of
cumulative total return assumes reinvestment of dividends. The graph was
prepared by Standard and Poor's Compustat, which obtained factual materials from
sources believed by it to be reliable, but which disclaims responsibility for
any errors or omissions contained in such data. The Stock Price Performance
Graph shall not be deemed incorporated by reference through any general
statement incorporating by reference this proxy statement into any filings under
the Securities Act of 1933 or under the Securities Exchange Act of 1934 and
shall not otherwise be deemed to be filed under such Acts.
COMPARATIVE FIVE-YEAR TOTAL RETURNS
ZENITH, S&P 500 AND S&P PC
(PERFORMANCE RESULTS THROUGH 12/31/99)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ZNT S&P 500 S&P PC
<S> <C> <C> <C>
1994 $100.00 $100.00 $100.00
1995 $98.35 $137.58 $135.40
1996 $130.90 $169.17 $164.52
1997 $127.78 $225.60 $239.33
1998 $119.18 $290.08 $222.69
1999 $110.94 $351.12 $166.00
</TABLE>
16
<PAGE>
INFORMATION RELATING TO INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP was Zenith's independent auditors for fiscal year
1999 and, upon the recommendation of the Audit Committee, the Board of Directors
of Zenith has selected PricewaterhouseCoopers LLP as Zenith's independent
auditors for fiscal year 2000. Representatives of PricewaterhouseCoopers LLP are
expected to be present at the Annual Meeting and will have an opportunity to
respond to appropriate questions and to make a statement if they desire to do
so. For information concerning Zenith's Audit Committee, see "Election of
Directors" above.
STOCKHOLDER PROPOSALS AT THE NEXT ANNUAL
MEETING OF STOCKHOLDERS
Stockholders of Zenith who intend to submit proposals to Zenith's
stockholders at the next Annual Meeting of Stockholders to be held in 2001 must
submit such proposals to Zenith no later than November 29, 2000 in order for
them to be included in Zenith's proxy materials for such meeting or no later
than February 12, 2001 if proposals are not sought to be included in such proxy
materials. Stockholder proposals should be submitted to Zenith National
Insurance Corp., 21255 Califa Street, Woodland Hills, California 91367,
Attention: Secretary.
By Order of the Board of Directors
JOHN J. TICKNER
SECRETARY
Dated: March 24, 2000
17
<PAGE>
[LOGO]
PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
OF ZENITH NATIONAL INSURANCE CORP.
FOR THE ANNUAL MEETING OF STOCKHOLDERS, MAY 18, 2000
The undersigned stockholder hereby appoints Harvey L. Silbert and
Stanley R. Zax and each or any of them (each with full power of
substitution), proxies for the undersigned to vote all shares of Common Stock
of Zenith National Insurance Corp. ("Zenith") owned by the undersigned at the
Annual Meeting of Stockholders to be held on Thursday, May 18, 2000, at 9:00
a.m., at the offices of Zenith, 21255 Califa Street, Woodland Hills,
California, and at any adjournments thereof, in connection with the matters
set forth in the Notice of Annual Meeting and Proxy Statement dated March 24,
2000 (the "Proxy Statement"), copies of which have been received by the
undersigned.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN ACCORDANCE WITH THE
INSTRUCTIONS OF THE STOCKHOLDER, BUT IF NO INSTRUCTIONS ARE GIVEN THIS PROXY
WILL BE VOTED FOR ELECTION OF DIRECTORS AS PROVIDED BY ZENITH'S PROXY
STATEMENT AND IN ACCORDANCE WITH THE DISCRETION OF THE PROXIES ON SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
IN THE EVENT OF CUMULATIVE VOTING IN THE ELECTION OF DIRECTORS, THE PROXIES
MAY DISTRIBUTE THE VOTES REPRESENTED BY THIS PROXY AMONG THE NOMINEES IN SUCH
PROPORTION AS THEY SEE FIT.
(Continued and to be marked, signed and dated on other side)
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TRIANGLE FOLD AND DETACH HERE TRIANGLE
<PAGE>
Please mark your votes as indicated in this example /X/
1. Election of Directors:
FOR all nominees listed below (except as marked to the contrary below) / /
WITHHOLD AUTHORITY to vote for all nominees listed below / /
Max M. Kampelman, Robert J. Miller, Leon E. Panetta, William Steele Sessions,
Harvey L. Silbert, Gerald Tsai, Jr., Michael Wm. Zavis and Stanley R. Zax.
(INSTRUCTION: To withhold authority for any individual nominee write that
nominee's name in the space provided below.)
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
2. In their discretion, upon such other matters as may properly come before
the meeting.
Dated: _______________________________________, 2000
Signature __________________________________________
Signature __________________________________________
NOTE PLEASE SIGN EXACTLY AS YOUR NAME APPEARS HEREIN. WHEN SIGNING AS
ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE YOUR FULL
TITLE AS SUCH. IF EXECUTED BY A CORPORATION, AN AUTHORIZED OFFICER SHOULD
SIGN, AND THE CORPORATE SEAL SHOULD BE AFFIXED. A PROXY FOR SHARES HELD IN
JOINT OWNERSHIP SHOULD BE SIGNED BY EACH JOINT OWNER.
Please mark, sign and date this Proxy and return it promptly in the
accompanying envelope, which requires no postage if mailed in the United
States.
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TRIANGLE FOLD AND DETACH HERE TRIANGLE
