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Consulting Agreement

This is an actual contract by Zenith National Insurance.
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Sectors: Insurance
Governing Law: California , View California State Laws
Effective Date: February 24, 2005
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This Consulting Agreement ("Agreement") is entered into by and between John J. Tickner (hereinafter "Tickner") and Zenith National Insurance Corp. (hereinafter "Zenith") on behalf of itself and its past and present officers, directors, agents, employees, attorneys, parents, subsidiaries, related companies, divisions, affiliated companies, successors and assigns, separately and collectively, with reference to the following facts and circumstances:

A. Tickner is employed by Zenith pursuant to a written Employment Agreement that expires by its term on March 1, 2005.

B. Although Tickner92s employment obligations with Zenith pursuant to his employment agreement will terminate on March 1, 2005, Tickner will continue as an employee at will until March 31, 2005 at which time Zenith is desirous of securing consulting services from Tickner, and Tickner is willing to provide such consulting service to Zenith, with regard to such matters that include, but are not limited to, regulatory/compliance audits and training; assisting with provider fraud initiatives; Riscorp runoff issues; litigation; reinsurance recoveries; reinsurance placement and recoverables; and assistance in the transition to a new General Counsel.

NOW, THEREFORE, in consideration of the foregoing and for good and valuable consideration, Zenith and Tickner hereby agree as follows:

1. Consultancy .

(a) Effective April 1, 2005, Tickner shall render services to Zenith as an independent contractor, consultant on a non-exclusive basis for a four year term, ("Consulting Term") commencing as of April 1, 2005 and terminating March 31, 2009.


(b) During the period between April 1, 2005 and March 31, 2007, Tickner shall make himself reasonably available for consulting with Zenith, at such times as Zenith may reasonably require not to exceed 240 hours in any calendar quarter. During this period, Tickner shall be paid a consulting fee of $21,666.67 per month. Zenith shall issue a Form 1099 with regard to such consulting fees.

(c) During the period between April 1, 2007 and March 31, 2009, Tickner shall make himself reasonably available for consulting with Zenith, at such times as Zenith may reasonably require not to exceed 120 hours in any calendar quarter. During this period, Tickner shall be paid a consulting fee of $10,833.33 per month. Zenith shall issue a Form 1099 with regard to such consulting fees.

(d) In the event Tickner determines that the consulting being requested of him in any quarter is reasonably likely to exceed the hours limitations set forth in subparagraph (b) and (c) above, he shall so notify Zenith and the parties shall discuss a mutually agreed upon arrangement for additional compensation.

(e) So long as Tickner shall serve as a consultant pursuant to this Agreement, Zenith agrees to provide Tickner with an office, phone, email, computer and secretarial support at its offices in Woodland Hills. The particular office within its facilities shall be selected by Zenith at its discretion. In addition, Zenith agrees to continue at its expense to provide Tickner with a telephone line for facsimile and DSL service at his home for so long as such service is needed by Tickner in connection with his consulting assignments. Tickner shall not use his Zenith office address or email address for the conduct of business on behalf of any entity other than Zenith. Further, Tickner agrees that he will not use his Zenith office, telephone or other Zenith services or facilities in a manner that could create a conflict of interest, liability or embarrassment to Zenith.


(f) Tickner shall provide such consulting services in the manner and at such location (including by telephone or in person at Zenith offices) as Zenith reasonably determines in good faith based on the nature and urgency of the matter(s) on which Tickner services are sought.

(g) Tickner shall be paid his consulting fee on the first of each month during the period of his consultancy with the first payment to be made April 1, 2005. Tickner shall be reimbursed for all reasonable out of pocket expenses to the extent they are approved by Zenith in writing in advance, including but not limited to expenses incurred for travel to the location of any consulting services outside of the geographic area in which Tickner maintains his principal residence.

(h) Nothing contained herein shall prevent Tickner after April 1, 2005, from seeking or accepting other consulting clients or employment; provided, however, Tickner may not accept consulting clients or employment from agents, insured parties competing insurance companies or any other entity that could create a conflict of interest with Zenith, without the express written approval from Zenith. Tickner may, however, terminate his consulting obligations under the Agreement at any time whether to accept competitive employment or otherwise. Any such termination of services by Tickner shall be preceded by written notice to Zenith setting forth the dates his consulting services will terminate. Tickner shall earn no further fees pursuant to paragraph 1(b) or (c), as applicable, after the date of cessation but Tickner shall be entitled to be reimbursed for expenses appropriately incurred prior to the date of his cessation of consulting services.

(i) As of April 1, 2005, the relationship between the parties is that of an independent contractor and not an employer/employee. Tickner is an independent contractor, and Zenith shall not assume the duties and responsibilities of an employer with respect to Tickner, including but not limited to payroll deductions, withholding,


employer92s taxes, workers92 compensation insurance, health insurance programs, sick leave benefits, retirement programs or any other benefits granted by Zenith to its employees; provided, however, Tickner shall continue to vest in the 7000 shares of restricted stock that had previously been granted to him, on the terms and condition set forth in the Restricted Stock Award Agreements and any amendments thereto. Form W-2s shall be issued to Tickner with regard to such restricted stock and the dividends related thereto as required by law. Except to the extent Zenith is obligated to withhold taxes, and is liable for taxes, on income reported on Form92s W-2, the payment of all taxes with regard to Tickner92s income and the providing of all benefits, if any, to Tickner himself or to his spouse, children or employees of Tickner shall be solely the responsibility of Tickner. Tickner understands and agrees that as an independent contractor he is not eligible to participate in any bonus or other program of employee benefits or equity based compensation sponsored by Zenith. Tickner agrees that he will indemnify and hold Zenith harmless from any and all claims whether for taxes, penalties, interest or otherwise based upon Tickner92s independent contractor status, including Tickner92s failure to make any necessary reports, file any necessary returns or pay any appropriate taxes or fees.

(j) Tickner agrees that to the extent he is requested to do so, he will assist in the transition of his duties to a new General Counsel, or otherwise, as requested by Zenith.

(k) Tickner agrees that during the duration of his consultancy he will be bound by the same rules and duties, including the duty of loyalty, as are employees of Zenith generally. Tickner further agrees that he will not engage in any activities which are directly or indirectly inconsistent with his status as a consultant to Zenith. This Agreement, and Tickner92s consultancy hereunder, may be terminated by Zenith for cause


in the event of any breach of this Agreement or misconduct. In the event such breach or misconduct is reasonably capable of cure, Zenith shall not have the right to terminate for cause unless and until the matter has remained unremedied for 10 business days after written notice to Tickner.

2. Confidentiality of Zenith Information and Other Obligations .

(a) Tickner acknowledges, understands and agrees that, as a result of his employment by Zenith and his consulting hereunder, he may have developed, obtained, or learned, and/or will in the future develop, obtain or learn, trade secrets or confidential information of Zenith (including attorney client or attorney work product information and information relating to Zenith92s data processing and/or claims handling procedures, business policies, strategies and other information). Tickner shall not, without the prior written consent and approval of Zenith, divulge to any person, firm or corporation, nor use to the detriment of Zenith or any other Released Party, nor use in any business, venture, or any organization of any kind, at any time during the Consulting Term or thereafter any trade secrets or confidential information including, but not limited to, trade secret or confidential information of the following types: claims handling, development, marketing, organizational, financial, accounting, managerial, administrative, production, distribution and sales information, data, specifications and processes presently owned, or developed in whole or in part both during the Consulting Term or at any time prior thereto (collectively, the "Confidential Material"). Confidential Material shall not include information that has been publicly disclosed by Zenith or included in any publicly available filing, report, or analysis or which is available to the public through lawful means unrelated to any disclosures by Tickner. Except in the performance of Tickner92s duties as a consultant to Zenith, Tickner shall not, directly or indirectly for any reason whatsoever, disclose or use


any such Confidential Material at any time during the Consulting Term or thereafter. All records, files, drawings, documents, equipment and other tangible items, wherever located, relating in any way to the Confidential Material or otherwise to Zenith92s business, which Tickner shall prepare, use or encounter, shall be and remain Zenith92s sole and exclusive property and shall be included in the Confidential Material. Upon or at any time following the termination of the Consulting Term, or sooner if requested by Zenith, Tickner shall promptly deliver to Zenith any and all of the Confidential Material, not previously delivered to Zenith, that may be in the possession or under the control of Tickner.

(b) Once Tickner has disclosed to Zenith processes, developments and discoveries conceived by Tickner (collectively, the "Tickner Work Product"), in any way related to the Confidential Material or the development, production, financing or marketing activity carried on by Zenith, whether conceived alone or with others during the performance of Tickner92s duties, and whether or not conceived during the regular working hours of Zenith, such Tickner Work Product shall become the sole and exclusive property of Zenith, and Tickner hereby assigns to Zenith Tickner92s entire right, title and interest in and to the
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