-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FDmcc2Ra3XcuOz3ayyr2cwsdImI3M96qaiys7Jd5D69RYDx4mvz/ptmSfdcLG7gi AMEnDMfWs5GPJ6CNdr9YqQ== 0000780118-96-000016.txt : 19961203 0000780118-96-000016.hdr.sgml : 19961203 ACCESSION NUMBER: 0000780118-96-000016 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19961129 EFFECTIVENESS DATE: 19961129 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMWEST INSURANCE GROUP INC CENTRAL INDEX KEY: 0000780118 STANDARD INDUSTRIAL CLASSIFICATION: SURETY INSURANCE [6351] IRS NUMBER: 952672141 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-17109 FILM NUMBER: 96674573 BUSINESS ADDRESS: STREET 1: 6320 CANOGA AVE STE 300 CITY: WOODLAND HILLS STATE: CA ZIP: 91367 BUSINESS PHONE: 8187041111 MAIL ADDRESS: STREET 1: 6320 CANOGA AVENUE SUITE 300 STREET 2: PO BOX 4500 CITY: WOODLAND HILLS STATE: CA ZIP: 91367 S-8 1 FORM S-8 REGISTRATION STATEMENT As filed with the Securities and Exchange Commission on November 27, 1996. Registration No. 333- =============================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------------- FORM S-8 Registration Statement Under The Securities Act of 1933 ---------------------------- AMWEST INSURANCE GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 95-2672141 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 6320 Canoga Avenue Suite 300, Woodland Hills, California 91367 (818) 704-1111 (Address, including zip code, and telephone number, including area code, of Principal Executive Offices) AMWEST INSURANCE GROUP, INC. EMPLOYEE STOCK PURCHASE PLAN (Full title of the plan) Mr. John E. Savage Co-Chief Executive Officer, President and Chief Operating Officer Amwest Insurance Group, Inc. 6320 Canoga Avenue, Suite 300 Woodland Hills, California 91367 (818) 704-1111 (Name, address, including zip code, and telephone number, including area code, of agent for service) with a copy to: Jonathan K. Layne, Esq. Gibson, Dunn & Crutcher LLP 333 South Grand Avenue Los Angeles, CA 90071 (213) 229-7000 - ------------------------------------------------------------------------------- CALCULATION OF REGISTRATION FEE - ------------------------------------------------------------------------------- Title of Proposed Proposed Securities Amount Maximum Maximum Amount of to be to be Offering Aggregate Registration Registered Registered Price Per Share Offering Price Fee Common Stock, 200,000 $12.375 (1) $ 2,475,000(1) $ 750.00 $.01 par value =============================================================================== (1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(h) of the Securities Act of 1933, as amended, on the basis of the average of the high and low prices of the Common Stock of Amwest Insurance Group, Inc. on the American Stock Exchange on November 26, 1996. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. Incorporation of Documents by Reference The following documents of Amwest Insurance Group, Inc. , a Delaware corporation (the "Company"), previously filed with the Securities and Exchange Commission (the "Commission") are hereby incorporated herein by this reference in and made part of this Registration Statement: (i) The Company's Annual Reports on Form 10-K for the fiscal year ended December 31, 1995; (ii) The Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996, June 30, 1996 and September 30, 1996; (iii) The Company's Current Reports on Form 8-K filed since December 31, 1995: The report dated January 30, 1996 included an Item 7 matter in which the Company, pursuant to the merger announcement, were required to file certain financial statements of Condor pursuant to Regulation 3.05(b) of Regulation S-X. The report dated March 12, 1996 included an Item 5 matter and Press Release announcing an agreement to purchase 100% of the stock of Southern California Bonding Services, Inc. The report dated March 19, 1996 included an Item 5 mater and Press Release announcing the completion of the merger of Condor Services, Inc. into the Company, following approval of the terms of the transaction by the stockholders of each of the two companies. (iv) The description of the Common Stock set forth under the heading "Description of Capital Stock" in the Company's Registration Statement on Form S-1 filed with the Commission on May 19, 1988 (File No. 33-9911), together with any amendment or report filed with the Commission for the purpose of updating such description; (v) All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act of 1934, as amended, after the date of this Registration Statement and prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which registers all securities then remaining unsold. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement. ITEM 4. Description of Securities Not applicable. ITEM 5. Interests of Named Experts and Counsel Not applicable ITEM 6. Indemnification of Directors and Officers Section 145 of the Delaware General Corporation Law (the "DGCL") makes provision for the indemnification of officers and directors in terms sufficiently broad to indemnify officers and directors of the Company under certain circumstances from liabilities (including reimbursement for expenses incurred) arising under the Securities Act. The Company's Certificate of Incorporation and Bylaws and the indemnification agreements between the Company and its officers and directors provide, in effect, that, to the fullest extent and under the circumstances permitted by Section 145 of the DGCL, the Company will indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is a director or officer of the Company or is or was serving at the request of the Company as a director or officer of another corporation or enterprise. The company may, in its discretion, similarly indemnify its employees and agents. The Company's Certificate of Incorporation relieves its directors from monetary damages to the company or its stockholders for breach of such director's fiduciary duty as directors to the fullest extent permitted by the DGCL. Under Section 102(b)(7) of the DGCL, a corporation may relieve its directors from personal liability to such corporation or its stockholders for monetary damages for any breach of their fiduciary duty as directors except (i) for a breach of the duty of loyalty, (ii) for failure to act in good faith, (iii) for intentional misconduct or knowing violation of law, (iv) for willful or negligent violation of certain provisions in the DGCL imposing certain requirements with respect to stock repurchases, redemption and dividends, or (v) for any transactions from which the director derived an improper personal benefit. Depending upon the character of the proceeding, under Delaware law, the Company may indemnify against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with any action, suit or proceeding if the person indemnified acted in good faith and in a matter he or she reasonably believed to be in or not opposed to the best interest of the Company, and, with respect to any criminal action or proceeding, had no cause to believe his or her conduct was unlawful. To the extent that a director or officer of the Company has been successful in the defense of any action, suit or proceeding referred to above, the Company will be obligated to indemnify him or her against expenses (including attorneys fees) actually and reasonably incurred in connection therewith. ITEM 7. Exemption from Registration Claimed Not Applicable. ITEM 8. Exhibits. ITEM 9. Undertakings (a) The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1993; (ii) To reflect in the prospectus any facts or events arising aft the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change in such information in the Registration Statement provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this section do not apply if the Registration Statement is on Form S-3, Form S-8 or Form F-3, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 and Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1993, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the Securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. SIGNATURES Pursuant to the requirements of the Securities Act, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Woodland Hills, State of California, on this day 26th day of November, 1996. AMWEST INSURANCE GROUP, INC. By: /s/ JOHN E. SAVAGE ------------------------------ John E. Savage President, Chief Operating Officer and Co-Chief Executive Officer POWER OF ATTORNEY Know all men by these presents, that each person whose signature appears below constitutes and appoints Richard H. Savage, John E. Savage and Steven R. Kay his true and lawful attorneys-in-fact and agents, each acting alone, with full powers of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, each acting alone, full powers and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might, or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, each acting alone, or his substitute or substitutes may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated. Signature Title Date Chairman of the Board and Co- Chief Executive Officer /s/RICHARD H. SAVAGE (Principal Executive Officer) November 26, 1996 - ------------------------ Richard H. Savage President, Chief Operating Officer, Co-Chief Executive /s/JOHN E. SAVAGE Officer and Director November 26, 1996 - ------------------------ John E. Savage Executive Vice President and /s/GUY A. MAIN Director November 26, 1996 - ------------------------ Guy A. Main Senior Vice President, Chief Financial Officer, Treasurer and Director (Principal Financial and /s/STEVEN R. KAY Principal Accounting Officer) November 26, 1996 - ------------------------ Steven R. Kay Senior Vice President and /s/NEIL F. PONT Director November 26, 1996 - ------------------------ Neil F. Pont /s/ARTHUR F. MELTON Director November 26, 1996 - ------------------------ Arthur F. Melton /s/THOMAS R. BENNETT Director November 26, 1996 - ------------------------ Thomas R. Bennett /s/ BRUCE A. BUNNER Director November 26, 1996 - ------------------------ Bruce A. Bunner /s/EDGAR L. FRASER Director November 26, 1996 - ------------------------ Edgar L. Fraser /s/JONATHAN K. LAYNE Director November 26, 1996 - ------------------------ Jonathan K. Layne /s/CHARLES L. SCHULTZ Director November 26, 1996 - ------------------------ Charles L. Schultz EXHIBIT INDEX Exhibit Sequentially Number Description Numbered Page 3.1 Restated Certificate of Incorporation of the Company as amended to date (incorporated by reference to Exhibit 3(3)(a) to the Company's Form 8-B Registration Statement No. 1-9580). 5.1 Opinion of Gibson, Dunn & Crutcher LLP relating to the Amwest Insurance Group, Inc. Employee Stock Purchase Plan 23.1 Consent of KPMG Peat Marwick LLP 23.2 Consent of Gibson, Dunn & Crutcher LLP (included in Exhibit 5.1). 24.1 Power of Attorney (included on Signature Page) 99.1 Form of Amwest Insurance Group, Inc. Employee Stock Purchase Plan - ------------------------------------- EX-5.1 2 OPINION RE LEGALITY November 26, 1996 Amwest Insurance Group, Inc. 6320 Canoga Avenue, Suite 300 Woodland Hills, California 91367 Re: Form S-8 Registration Statement - Amwest Insurance Group, Inc. Employee Stock Purchase Plan Ladies and Gentlemen: We have acted as special counsel to Amwest Insurance Group, Inc., a Delaware corporation (the "Company"), in connection with the preparation of a Registration Statement on Form S-8 to be filed with the Securities and Exchange Commission (the "Registration Statement") with respect to the registration under the Securities Act of 1933, as amended (the "Act"), of 200,000 shares of Common Stock, $.01 par value (the "Shares"), of the Company which have been reserved for issuance from time-to-time pursuant to awards granted and to be granted pursuant to the Company's Employee Stock Purchase Plan (the "Plan"). We are familiar with the corporate actions taken and to be taken by the Company in connection with the authorization, issuance and sale of the Shares and have made such other legal and factual inquiries as we deem necessary for the purpose of rendering this opinion.We have examined, among other things, the Company's Certificate of Incorporation and Bylaws, the Plan and related agreements, and records of corporate proceedings and other actions taken and proposed to be taken by the Company in connection with the authorization, issuance and sale of the Shares pursuant to awards granted under the Plan. Based on the foregoing and in reliance thereon, it is our opinion that the Shares, when issued pursuant to awards granted and exercised in accordance with the provisions of the Plan and related agreements, will be legally issued, fully paid and non-assessable.The Company is incorporated under the laws of the State of Delaware. We are not admitted to practice in Delaware. However, we are generally familiar with the Delaware General Corporation Law and have made such review thereof as we consider necessary for the purpose of rendering this opinion. Subject to the foregoing, this opinion is limited to Delaware and federal law.We hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement. In giving this consent, we do not admit that we are within the category of persons whose consent is required under Section 7 of the Act or the General Rules and Regulations of the Commission. Very truly yours, GIBSON, DUNN & CRUTCHER LLP EX-23.1 3 CONSENTS OF EXPERTS AND COUNSEL ACCOUNTANTS' CONSENT Board of Directors Amwest Insurance Group, Inc.: We consent to the use of our reports incorporated herein by reference. KPMG PEAT MARWICK LLP Los Angeles, California November 22, 1996 EX-99.1 4 FORM OF EMPLOYEE STOCK PURCHASE PLAN AMWEST INSURANCE GROUP, INC. EMPLOYEE STOCK PURCHASE PLAN 1. Purpose of the Plan. Under this Employee Stock Purchase Plan (the "Purchase Plan") of Amwest Insurance Group, Inc., a Delaware corporation, (the "Company"), certain eligible employees will be able to purchase directly from the Company shares of the Company's common stock ("Common Stock") at a discount from the market price, and to pay the purchase price in installments by payroll deductions. The Purchase Plan is designed to advance the best interests of the Company, to promote employee morale, and to encourage employee ownership of the Company's Common Stock. The Purchase Plan is intended to qualify as an "employee stock purchase plan" under Section 423 of the Internal Revenue Code of 1986, as amended (the "Code") (including any amendments or replacements of such section), and the Purchase Plan shall be so construed. 2. Stock Subject to Plan. Under the Purchase Plan, there is a maximum of 200,000 shares of Common Stock (subject to adjustment as provided under Section 14) which may be sold. Such shares may be either authorized but unissued shares, or shares reaquired by the Company for sale under the Purchase Plan. The Common Stock to be purchased under the Purchase Plan shall be previously issued shares purchased in the open market or in privately-negotiated transactions. 3. Eligible Employees. The employees eligible to be considered for participation in the Purchase Plan are any persons employed by the Company or its parent or subsidiaries for at least 3 months; provided, however, that the term "Eligible Employee" shall specifically exclude: (a) any employee whose customary working schedule is 20 hours or less per week; (b) any employee whose customary employment is 5 months or less in any calendar year; (c) any employee who owns, or immediately after an offering under the Purchase Plan would be deemed to own (under Section 424(d) of the Code, relating to attribution of stock ownership) shares of stock possessing 5% or more of the total combined voting power or value of all classes of stock of the Company or of any parent or subsidiary of the Company. For this purpose, shares which the employee may purchase under outstanding options shall be treated as stock owned by the employee; and (d) any employee who resides in a jurisdiction whose laws prohibit participation in the Purchase Plan. 4. Method of Participation. "Purchase Periods" shall be of one-month duration, commencing on the first day of each month. Each Eligible Employee on the first day of a Purchase Period may elect to participate in the Purchase Plan ("Participant") by executing and delivering, at least 15 days prior to such day, a payroll deduction authorization, on the terms and conditions specified in Section 5. Such Employee will thereby become a "Participant" for such Purchase Period and for each subsequent consecutive Purchase Period, subject to Section 5 below. 5. Payroll Deductions. All Participant contributions to the Purchase Plan shall be made only by payroll deductions. Each enrollment form shall specify the amount that the Participant elects to contribute under the Purchase Plan for each payroll period and shall authorize the Company to withhold such amount from the salary of such Participant with respect to each payroll period thereafter until such Participant's participation in the Purchase Plan is terminated or until the amount of such deductions is changed or suspended as hereafter provided. The payroll deduction authorization shall request withholding at a rate (in whole percentages) of not less than 1% nor more than 15% from the Participant's Compensation by means of substantially equal payroll deductions over the Purchase Period. The payroll deduction authorization shall remain in effect for consecutive subsequent Purchase Periods unless changed or revoked by the Participant pursuant to this Section 5. A Participant may increase or reduce the withholding rate of his or her payroll deduction authorization by one or more whole percentage points (but not less than 1% or more than 15%) or may cease Participation entirely by delivering a revised enrollment/change form to the Company. Such increase or reduction in withholding or cessation of participation shall become effective at the earliest administratively feasible time. All amounts withheld in accordance with a Participant's payroll deduction authorization shall be credited to a withholding account for such Participant as soon as administratively feasible after payroll withholding. The Company shall be entitled to use of the contributions immediately after payroll withholding, may maintain the contributions as a single account, and shall have no obligation to pay interest with respect to the contributions or Common Stock of any Participant. 6. Purchase of Shares. Each person who is a Participant on the first business day of a Purchase Period shall, as of such day, automatically receive a share purchase right to purchase shares of the Common Stock during such Purchase Period, subject to the following conditions. Subject to the limitation specified below, such right to purchase Common Stock shares shall be for a number of shares of Common Stock, determined by dividing (i) the balance in the Participant's withholding account on the last day of the Purchase Period by (ii) the purchase price per share of the Common Stock determined under Section 7. In no event shall a Participant receive a share purchase right under the Purchase Plan in any calendar year exceeding $25,000 (or such different amount as may be permitted under the Code and still comply with the requirements of the Code) in fair market value (as calculated in the manner provided for in the Code). 7. Purchase Price. The purchase price per share of Common Stock purchased under the Purchase Plan shall be 92% of the fair market value of the Common Stock on the last business day of the Purchase Period, defined as the closing price of the Company's Common Stock on the American Stock Exchange (or such other securities market on which the Company's Common Stock is primarily traded) on such date. 8. Purchase of Shares. Each Participant in the Purchase Plan on the last business day of a Purchase Period shall be deemed to have exercised on such day the share purchase right granted to him or her for that Purchase Period. Upon such exercise, the balance of the Participant's withholding account shall be applied to the purchase of the number of shares of Common Stock determined under Section 6. 9. Cancellation of Share Purchase Right; Withdrawal. A Participant who holds a share purchase right under the Purchase Plan may at any time prior to exercise thereof under Section 8 cancel such share purchase right as to all (but not less than all) the shares subject or to be subject to such share purchase right by written notice delivered to the Company. A Participant who cancels a share purchase right under the Purchase Plan shall be deemed to have withdrawn from the Purchase Plan. A Participant who terminates his or her payroll deduction authorization pursuant to Section 5 shall be deemed to have withdrawn from the Purchase Plan. Any Participant who cancels a share purchase right or terminates his or her payroll deduction authorization may again become a Participant in accordance with such rules and regulations as the Company may adopt from time-to-time relating to re-entry in the Purchase Plan. Upon withdrawal, the balance in his or her withholding account shall be returned to him or her as soon as administratively feasible. 10. Termination of Employment. Subject to Section 11, upon the termination of a Participant's service with the Company for any reason, he or she shall cease to be a Participant, and any share purchase right held by such Participant under the Purchase Plan shall be deemed canceled. The balance of his or her withholding account shall be returned to him or her, and he or she shall have no further rights under the Purchase Plan. 11. Death of Participant. A Participant may file a written designation of "Designated Beneficiary". Such designation shall also provide the Participant' election whether to either (i) cancel (pursuant to Section 9) the Participant's share purchase right upon his or her death or (ii) apply, as of the last business day of the Purchase Period, the balance of the deceased Participant's withholding account at the time of death to the exercise of his or her share purchase right (pursuant to Section 8). In the absence of a valid election otherwise, the death of a Participant shall be deemed to effect a cancellation of his or her share purchase right pursuant to Section 9. A designation of Designated Beneficiary and the foregoing election may be changed by the Participant at any time, by written notice to the Company. In the event of the death of a Participant and receipt by the Company of proof of the identity and existence at the Participant's death of a Designated Beneficiary, the Company shall deliver to such beneficiary the Common Stock or cash in the Participant's account. If there is no surviving Designated Beneficiary, then the Company shall deliver the Common Stock or cash in the Participant's account to the executor or administrator of the estate of the Participant. No Designated Beneficiary shall, prior to the death of the Participant by who he or she has been designated, acquire any interest in any Common Stock or cash credited to the Participant under the Purchase Plan. 12. Participant' Rights Not Transferable. All Participants shall have the same rights and privileges under the Purchase Plan. Each Participant's rights and privileges under the Purchase Plan may be exercisable during his or her lifetime only by him or her. No share purchase right shall be assignable or transferable except by will or under the laws of descent and distribution, and no right or interest of any Participant shall be subject to any lien, obligation or liability of the Participant. If any Participant violates the terms of this Section 12, then any share purchase right held by him or her may be terminated by the Company and upon return to the Participant of the balance of his or her withholding account, all his or her rights under the Purchase Plan shall terminate. 13. Administration of Purchase Plan; Costs. The Purchase Plan shall be administered by a committee comprised of at least two directors (the "Committee"). Members of the Committee shall be selected by the Board of Directors. To the extent necessary to comply with the requirements of Rule 16b-3, the Committee shall consist of two or more Disinterested Directors. Also, if the requirements of Section 162(m) of the Code are intended to be met, the Committee shall consist of two or more "outside directors" within the meaning of Section 162(m) of the Code. The Committee shall have sole and complete authority to adopt, alter and repeal such administrative rules, guidelines and practices governing the operation of the Purchase Plan as it shall from time-to-time deem advisable, and to construe, interpret, and administer the terms and provisions of the Purchase Plan and the agreements thereunder, subject to the overall supervision of the Board of Directors and to the limitations of Section 423 of the Code. The operational details relating to the day-to-day functioning of the Purchase Plan shall be handled by such person(s) as the Company may from time-to-time designate. The determinations and interpretations made by the Committee are final, conclusive, and binding on all participants. If the Company in its discretion so elects, it may retain a brokerage firm, bank or other financial institution to assist in the purchase of shares, delivery of reports or other administrative aspects of the Purchase Plan. All costs and expenses incurred in administering the Purchase Plan shall be paid by the Company, except that any stamp duties or transfer taxes applicable to participation in the Purchase Plan shall be charged to the account of the Participant. Brokerage fees for the purchase of shares by a Participant shall be paid by the Company, while brokerage fees for the sale of shares by a Participant shall be paid by the Participant. 14. Change in Capitalization. If the Committee shall determine that any stock dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, exchange of shares, or other similar corporate event affects the Common Stock such that an adjustment is required in order to preserve the benefits or potential benefits intended to be made available under the Purchase Plan, then the Committee shall adjust appropriately the number and kind of shares which thereafter may be purchased under the Purchase Plan and the number and kind of shares subject to outstanding share purchase rights. 15. Amendment and Termination of Purchase Plan. The Board of Directors may amend, abandon, suspend or terminate the Purchase Plan or any portion thereof at any time in such respects as it may deem advisable in its sole discretion, provided that no amendment shall be made without stockholder approval if such approval is necessary to comply with any tax or regulatory requirement, including for these purposes any approval requirement that is prerequisite for exemptive relief under Section 16(b). The Purchase Plan shall terminate automatically as of May 31, 2006. The Purchase Plan shall terminate, in any case, when all or substantially all of the Common Stock reserved for the purposes of the Purchase Plan has been purchased by Participants. 16. Effective Dates. The Purchase Plan shall be in effect commencing on May 31, 1996, subject to approval by the Company's stockholders. 17. General. (a) No Participant or Designated Beneficiary shall have any rights as a stockholder with respect to any shares of Common Stock to be distributed under the Purchase Plan until he or she has become the holder thereof. (b) The validity, construction, interpretation, administration and effect of the Purchase Plan and of its rules and regulations, and rights relating to the Purchase Plan, shall be determined solely in accordance with the laws of the State of Delaware and, to the extent applicable, federal law. (c) Restrictions on Issuance of Shares (1) No shares of Common Stock may be purchased under the Purchase Plan unless; (i) the shares pertaining to such share purchase right have been registered under applicable securities laws or are exempt from such registration; (ii) the prior approval has been obtained from any regulatory body having jurisdiction ; and (iii) in the event the Common Stock has been listed on any exchange, the shares pertaining to such share purchase right have been duly listed on such exchange in accordance with the procedure specified therefor. The Company shall be under no obligation to effect or obtain any listing, registration, qualification, consent or approval with respect to shares pertaining to any share purchase right granted under the Purchase Plan. If the shares to be issued upon the exercise of any share purchase right granted under the Purchase Plan are intended to be issued by the Company in reliance upon the exemptions from the registration requirements of applicable securities laws, the recipient of the share purchase right, if so requested by the Company, shall furnish to the Company such evidence and representations, including an opinion of counsel, satisfactory to it, as the Company may reasonably request. (2) The Company shall not be liable for damages due to a delay in the delivery or issuance of any stock certificates for any reason whatsoever, including, but not limited to, a delay caused by listing, registration or qualification of the shares of Common Stock pertaining to any share purchase right granted under the Purchase Plan upon any securities exchange or under any applicable law or the effecting or obtaining of any consent or approval of any governmental body. (d) The Company expressly reserves the right at any time to terminate a Participant's employment free from any liability or any claim under the Purchase Plan. Neither the Purchase Plan nor any share purchase right granted hereunder is intended to confer upon any Participant any rights with respect to continuance of employment or other utilization of his or her services the Company or its parent or subsidiaries, nor to interfere in any way with his or her right or that of his or her employer to terminate his or her employment or other services at any time (subject to the terms of any applicable written agreement). The loss of existing or potential profit in share purchase rights shall not constitute an element of damages in the event of termination of employment for any reason, even if the termination is in violation of any obligation to the Participant. IN TESTIMONY WHEREOF, Amwest Insurance Group, Inc. has executed this Employee Stock Purchase Plan by its officers thereunto duly authorized. AMWEST INSURANCE GROUP, INC. By: /s/ RICHARD H. SAVAGE Richard H. Savage Chairman of the Board and Co-Chief Executive Officer ATTEST: By: /s/ RICHARD S. BUSCH Richard S. Busch Secretary -----END PRIVACY-ENHANCED MESSAGE-----