EXHIBIT 10.33
May 13, 1998
Mr. Robert P. Restrepo, Jr.
6 Kenmore Road
Bloomfield, CT 06002
Dear Bob:
I am pleased to amend our earlier offer of employment to join Allmerica
Financial as President of Allmerica Property and Casualty Companies, Inc. The
terms of your employment are as follows:
1. Your annual salary, payable bi-weekly, will be $425,000. Your first
performance review date will be 1/1/99 at which time you will be considered
for a further salary increase and grant of stock within our Long Term Stock
Program. You will also receive an allowance for ground transportation of
up to $25,000 per year.
2. You will receive a one time sign-on bonus of $250,000 concurrent with your
date of hire.
3. You will be a participant in the 1998 Annual Incentive Compensation
Program, with an award target of 75% and 150% as a maximum award of your
annualized base salary. You will be guaranteed a 50% award for the 1998
program which amounts to $212,500, with potential for more as generated by
the corporate formula applying your target and maximum award potential. We
anticipate utilizing the same basic formula for 1999 utilizing our 1999
financial objectives as criteria to measure our accomplishments.
Mr. Robert P. Restrepo, Jr.
May 13, 1998
Page 2
4. You will be a participant in the Long Term Stock Incentive Plan as
indicated below, which includes consideration of the economic value you
would relinquish concurrent with your joining Allmerica Financial and your
participation as an executive in the 1998 AFC stock programs:
a. Receive a 6,000 share grant of restricted stock, concurrent with your
employment, with a three year "cliff" vesting requirement,
b. Receive a 10,000 grant of restricted stock, concurrent with your
employment, with a three year "cliff" vesting requirement, with the
understanding that you would purchase an equal number of shares in the
open market and hold them for the same three year period. We have
made arrangements for the Operating Committee members to secure a
personal loan to help meet this requirement if requested, and
c. Receive a grant of 50,000 stock options, concurrent with your
employment. These options would include the maximum limitation of
incentive stock options with the balance being non-qualified stock
options, each to utilize a five year, 20%, graded, vesting schedule,
with ten years from date of grant to exercise once vested. All
options are subject to the provisions of the Stock Option Plan.
5. In the event that Jack O'Brien ceases to be President and CEO, for whatever
reason, within three years of your commencing employment with the Company,
it is agreed that you have, for any reason, the option within 90 days of
his leaving, to terminate your employment, and you would be eligible to
receive the following payments:
a. You would receive a payment equal to your annualized base salary,
projected average annualized incentive compensation and the premium
cost of your medical benefits for a period of 12 months,
Mr. Robert P. Restrepo, Jr.
May 13, 1998
Page 3
b. You would be entitled to have your 6,000 grant of restricted shares
and your 10,000 matched restricted stock converted into a cash payment
determined in the following manner:
Your 16,000 shares of restricted stock would vest on a monthly
basis, 1/36 per month, ("Your Vested Amount"). Your Vested
Amount would be multiplied at a rate of $65.00 per share. For
example at the end of 13 months, you would be vested in 5,778
shares (13/36 of 16,000). That sum would be multiplied by $65.00
resulting in a cash payment of $375,570,
c. Your 50,000 grant of options would be fully vested concurrent with
your termination from the Company,
d. In the event you receive all payments pursuant to paragraph 5, you
agree to execute a mutually acceptable severance agreement with the
Company.
6. You would become a category 2 participant in the Company's Change of
Control program. If you receive benefits under this plan, you would not be
entitled to receive the benefits set forth in paragraph 5 above.
7. While we understand that you do not plan to move your residence at this
time, you will be eligible for our executive relocation package, should you
ultimately find it appropriate to move closer to the company. In the event
you decide to move to the greater Worcester area within the first five
years of employment, in addition to the executive relocation program, the
Company would reimburse you for any losses that you incur equal to one half
of your out of pocket losses you incur on the sale of your home. Your
original purchase price plus the recent renovation of $200,000, less the
then current market value shall determine the amount of your loss, if any.
Mr. Robert P. Restrepo, Jr.
May 13, 1998
Page 4
8. You will be eligible to participate in Allmerica Financial's benefit
programs (including but not limited to Group Medical, Life, Dental, Short
and Long Term Disability, 401(k) Match Plan and Cash Balance Plan), in
accordance with the eligibility and entrance date requirements for each
plan.
9. You will be eligible to earn four (4) weeks vacation annually.
10. You would be eligible to join a country club or other club of your choosing
at the expense of Allmerica Financial, such expense to be imputed to you as
income.
As we discussed this morning, Brooks is proceeding to conduct the normal
referencing with individuals provided by you which we hope to have completed by
Wednesday, May 13, 1998. We remain very excited about your joining the Allmerica
team and look forward to your formal acceptance of our offer. Please do not
hesitate to call me at (508) 855-2524 if you have any questions.
Sincerely,
Bruce C. Anderson