CONSULTING AGREEMENT
This Agreement, effective May 21, 1999, between Amwest Insurance
Group, a Delaware corporation, its subsidiaries and affiliates ("Amwest") with
its principal place of business at 0000 Xxx Xxxxxxxx Xxxx, Xxxxxxxxx,
Xxxxxxxxxx 00000 and Xxxxxxx X. Xxxxxx ("Xxxxxx") with his principal place of
business at 0000 Xxx Xxxx Xxxx, X.X. Xxx 0000, Xxxxxx Xxxxxx, Xxxxxxxxxx
00000.
RECITALS
WHEREAS Xxxxxxx X. Xxxxxx, Chairman of the Board and Co-Chief
Executive Officer of Amwest announced his plans to retire, effective May 21,
1999, as Co-Chief Executive Officer of Amwest, and therefore step down as a
member of the executive management team of the company; and
WHEREAS Amwest desires to engage Savage's service as a consultant to
Amwest, and
WHEREAS Savage is willing to act as a consultant for Amwest upon the
terms stated below.
NOW THEREFORE, the parties agree as follows:
AGREEMENT
Article 1.0 Term of Contract, Renewal
1.01 Effective Date.
This Agreement will become effective May 21, 1999 and will
continue in effect through December 31, 2004, unless terminated earlier.
1.02 Renewal.
At the sole option of Savage, this Agreement may be renewed
for an additional five-year period through December 31, 2009, by written notice
given on or before December 3 1, 2004. Such renewal must be communicated in
writing in the manner provided for by this Agreement.
Article 2.0 Consulting Services Terms and Conditions.
2.01 Services Provided.
At the request of Amwest, Savage will be available to provide
advisory and consulting, services to Amwest.
2.02 Method of Performing Services.
Amwest and Savage will jointly determine the method, details,
and means for performing the above-described services.
2.03 Status of Savage.
As of January 1, 2000, Savage will no longer be an employee
of Amwest and
specifically waives any rights such as he might have enjoyed as an employee.
During the period commencing January 1, 2000 through the term of this Agreement,
(as it may be renewed), Savage shall serve as an independent Contractor. Savage
agrees that effective January 1, 2000 he shall not be or serve as an employee,
partner, agent, or principal of Amwest while this Agreement is in effect. Savage
further agrees that he shall not be entitled to the rights or benefits afforded
to Amwest's employees, except as specifically provided for in this Agreement.
2.04 Payment of Income Taxes.
Savage is responsible for paying, when due, all income taxes,
including estimated taxes incurred as a result of the compensation paid by
Amwest to Savage for services under this Agreement. On request, Savage will
provide Amwest with proof of timely payments. Savage agrees to indemnify Amwest
for any claims, costs, losses, fees, penalties, interest, or damages suffered by
Amwest resulting from Savage's failure to comply with this provision.
Article 3.0 Compensation.
3.01 Flat Rate.
In consideration for the services to be performed by Savage,
commencing January 1, 2000, Amwest agrees to pay Savage one hundred thousand
dollars ($100,000) per year.
3.02 Date for Payment of Compensation.
For services rendered under this Agreement, Amwest agrees to
pay Savage the sum set forth in Article 3.01 of this Agreement in twelve equal
monthly payments, payable on the first day of each month.
3.03 Payment of Expenses.
Amwest will reimburse Savage for all reasonable expenses
incurred in performing services under this Agreement. The term "expenses"
includes: costs of travel, telephone bills, supplies, entertainment expenses,
and other approved expenses. Savage will provide Amwest with receipts for all
expenses pursuant to Amwest's usual policy for reimbursement of expenses.
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3.04 Medical Insurance Coverage
Effective January 1, 2000, Amwest agrees to purchase and
continue to keep in force for the duration of this Agreement "supplemental
medical insurance" or "Medi-Gap" coverage on behalf of Savage and his wife Xxxx
Xxxxxx.
Article 4.0 Obligations of Savage.
4.01 Minimum Amount of Service.
Savage agrees to work sufficient hours each month, as may be
agreed by Savage and Amwest, in order to perform the above-described services.
4.02 Time and Place of Performing Work.
Savage may perform the services under this Agreement at any
suitable time and location of his choice.
4.03 Tools, Materials, and Equipment.
Savage and Amwest will agree as to who will supply tools,
materials, and equipment required to perform the services required under this
Agreement.
4.04 Assignment.
Neither this Agreement nor any duties or obligations under
this Agreement may be assigned by Savage without the prior written consent of
Amwest.
Article 5.0 Obligations of Amwest.
5.01 Cooperation of Amwest.
Amwest agrees to comply with all reasonable requests of Savage
necessary to the performance of Savage's duties under this Agreement.
5.02 Place of Work.
Amwest agrees to famish space at Amwest's premises for use by
Savage while performing the above-described services.
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5.03 Assignment.
This Agreement and all of Amwest's duties and obligations
under this Agreement may be assigned, without prior written consent of
Savage, by Amwest to any person or entity so long as: (a) such person
or entity agrees in writing to assume in full all obligations of
Amwest under this Agreement, and (b) such person or entity has, in the
reasonable judgment of Savage, the financial ability to discharge the
financial obligations of Amwest hereunder.
Article 6.0 Termination of Agreement.
6.01 Expiration of Agreement.
Unless otherwise terminated as provided in this Agreement,
this Agreement will continue in effect until December 31, 2004, and shall then
terminate unless renewed pursuant to Article 1.02 or by mutual agreement between
the parties.
6.02 Termination on Occurrence of Stated Events.
This Agreement will terminate automatically upon Savage's
death or total Disability and Amwest shall be under no obligation to pay any
amounts to Savage thereafter.
6.03 Termination at the Election of a Party
This Agreement may be terminated at the election of either
party without cause upon giving the other party 5 days written notice. In the
event Amwest elects to terminate this Agreement under this Article, the unpaid
balance of the flat rate specified in Article 3.01 for the entire term of this
Agreement (such term to be defined as those periods of time as provided for by
both Section 1.01 and 1.02) shall be immediately due and payable to Savage. In
the event Savage elects to terminate this Agreement under this Article, the
unpaid balance of the flat rate specified in Article 3.01 shall be retained by
Amwest and Amwest shall be under no obligation to pay such amounts to Savage
thereafter.
6.03 Termination for Default.
If either party defaults in the performance of this Agreement
or materially breaches any of its provisions, the non-breaching party may
terminate this Agreement by giving written notification to the breaching party.
Termination will take effect immediately on receipt of notice by the breaching
party or five (5) days after mailing of notice, whichever occurs first. For the
purposes of this Article, material breach of this Agreement includes, but is not
limited to, the following:
(a) Amwest's failure to pay Savage any compensation due
within thirty (30) days after written demand for
payment.
(b) Savage's failure to complete the services specified in
Article 2.01.
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(c) Savage's material breach of any representation or
agreement contained in this Agreement.
(d) Amwest's material breach of any representation or
agreement contained in this Agreement.
6.04 Remedies for Default.
(a) If Amwest defaults in the performance of this Agreement
or materially breaches any of its provisions, the
unpaid balance of the flat rate specified in Article
3.01 for the entire term of this Agreement (such term
to be defined as those periods of time as provided for
by both Section 1.01 and 1.02) shall be immediately due
and payable to Savage.
(b) If Savage defaults in the performance of this Agreement
or materially breaches any of its provisions, the
unpaid balance of the flat rate specified in Article
3.01 shall be retained by Amwest and Amwest shall be
under no obligation to pay such amounts to Savage
thereafter.
Article 7.0 General Provisions.
7.01 Notices.
Any notices required to be given under this Agreement by
either party to the other may be effected by personal delivery in writing or by
mail, registered or certified, postage prepaid with return receipt requested or
through overnight delivery via a package delivery service. Such notices must be
addressed to the parties at the addresses appearing in the introductory Article
of this Agreement, but each party may change the address by giving written
notice in accordance with this Article. Notices delivered personally will be
deemed communicated as of the day of receipt or the fifth day after mailing,
whichever occurs first.
7.02 Entire Agreement of the Parties.
This Agreement supersedes any and all agreements, either oral
or written, between the parties with respect to the rendering of services by
Savage for Amwest and contains all of the representations, covenants, and
agreements between the parties with respect to the rendering of those services.
Each party to this Agreement acknowledges that no representations, inducements,
promises, or agreements, orally or otherwise, have been made by any party, or.
anyone acting on behalf of any party, which are not contained in this Agreement,
and that no other agreement, statement, or promise not contained in this
Agreement will be valid or binding. Any modification of this Agreement will be
effective only if it is in writing signed by the party to be charged.
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7.03 Partial Invalidity.
If any provision of this Agreement is held by a court of
competent jurisdiction to be invalid, void, or unenforceable, the remaining
provisions will continue in full force and effect without being impaired or
invalidated in any way.
7.04 Payment of Moneys Due Deceased Savage.
If Savage dies before completing the services under this
Agreement, any moneys due Savage from Amwest under this Agreement as of the date
of death will be paid to Savage's executors, administrators, heirs, personal
representatives, successors, and assigns.
7.05 Arbitration.
Any controversy or claim arising out of or relating to this
Agreement or the breach of the Agreement will be settled by arbitration in
accordance with the rules of the American Arbitration Association. Judgment on
the award rendered by the arbitrators may be entered in any court having
jurisdiction over the award.
7.06 Attorney's Fees
If any legal action, including an action for declaratory
relief, is brought to enforce or interpret the provisions of this Agreement, the
prevailing, party will be entitled to reasonable attorneys' fees, which may be
set by the court in the same action or in a separate action brought for that
purpose, in addition to any other relief to which that party may be entitled.
7.07 Governing Law.
This Agreement will be governed by and construed in accordance
with the laws of the State of California.
Executed at Calabasas, California on January 10, 2000.
Amwest: Amwest Insurance Group Savage: Xxxxxxx X. Xxxxxx
A Delaware corporation
By:
Xxxxxx X. Xxx Xxxxxxx X. Xxxxxx
Chief Financial Officer
Senior Vice President
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