October 10, 2003
Robert P. Restrepo, Jr.
757 Salisbury Street
Worcester, Massachusetts 01609
Dear Bob:
You and First Allmerica Financial Life Insurance Company (the "Company")have
mutually agreed to terminate your employment relationship pursuant to the
terms and conditions set forth below. This letter agreement contains a release
and waiver of any potential claim arising out of your employment relationship or
the termination of your employment relationship (the "Separation Agreement" or
"Agreement"). It is important that you read and understand the following terms:
1. Resignation: You have resigned as President and Chief Executive Officer of
the Allmerica Property & Casualty Companies, Inc. and any other titles or
officer/director positions that you used or held in subsidiaries or
affiliates of the Company as of September 18, 2003.
2. Continued Employment for Limited Time; Additional Services: You will
continue as an employee of the Company to provide consultative advice,
support, transition assistance and other services to the Company for a
period of sixty (60) days following your resignation, namely, until
November 17, 2003. Such employment may continue thereafter (but in no case
beyond December 31, 2003) if requested at the sole discretion of the
President of Allmerica Financial Corporation, namely, Frederick H.
Eppinger, and if agreeable by you. Your services pursuant to this Agreement
shall be as an employee and not as an officer of Allmerica Financial
Corporation or any of its subsidiaries or affiliates. The actual services
to be provided by you shall be determined by Mr. Eppinger from time to
time. During the period of time for which you are providing services, you
shall be paid at your current salary rate and be entitled to your existing
fringe benefits.
3. Severance Compensation: Pursuant to the terms of an Employment Agreement
dated November 1, 2002 between the Company and you (the "Employment
Agreement"), you are entitled to receive a severance benefit equal to
$600,000. This benefit will be paid to you upon the termination of your
employment pursuant to this Agreement. This
Agreement shall supercede theEmployment Agreement, which is hereby
terminated and you shall have no further rights thereunder.
4. 2003 Incentive Compensation: You will receive a 2003 Short Term Incentive
Compensation award in the amount of $227,800, payable to you as of December
31, 2003, conditioned on applying such award to the loan as described
below. The Company, as of the date the award is payable to you, shall
credit the net amount (the amount remaining after deducting applicable
Federal and State income and other taxes) to any amounts then unpaid under
the Credit Line Promissory Note dated February 5, 2001 from AMGRO, Inc. to
you and your spouse, Mary Frances Restrepo (the "Credit Line Promissory
Note"), with any amount in excess of the outstanding balance and interest
accrued thereunder to be payable to you. You acknowledge that AMGRO, Inc.
may apply this payment against principal or interest, or a combination of
both as it, in its sole discretion, determines.
5. COBRA Benefit: Once your employment relationship has ended (i.e. when your
services are no longer required pursuant to the provisions of Section 2
above) the Company agrees to pay on your behalf the premiums due pursuant
to the terms of your COBRA election for your existing medical and dental
benefits. This benefit will continue until the earlier of your commencing
new employment and being eligible to receive medical and dental benefits,
your being eligible to obtain fringe benefits on a group basis from another
source or eighteen (18) months from the date your COBRA benefits commence.
For purposes of this section it shall be construed that you are eligible
for medical and dental benefits if, as a partner, joint venturer,
independent contractor or any other status, you are eligible to receive
medical and dental benefits at a group rate.
6. Vacation Entitlement: The Company will also pay you for any accrued unused
vacation time that you are entitled to as of the date your employment is
terminated. Signing this Agreement is not required for you to receive the
payments described in this paragraph.
7. Outplacement: The Company will make available to you so-called "Executive
Outplacement Assistance" for a period of twelve (12) months, beginning
immediately, at a mutually acceptable outplacement firm.
8. Stock Plan: All of your unvested options, unvested restricted stock and
unexercised vested options under the Allmerica Financial Corporation
Long-Term Stock Incentive Plan (the "Stock Plan") will be cancelled and you
shall have no rights with respect thereto and such options and shares shall
revert to the Stock Plan upon the termination of your employment. To the
extent anything herein is inconsistent with the Stock Plan, the provisions
of the Stock Plan shall govern.
9. General Cooperation: After termination of your employment, you agree to be
generally available to respond to questions and/or inquiries, and provide
other information concerning matters that were within the ambit of your
responsibility during your employment with the Company and generally
cooperate with respect to matters relating to the Company. It is
anticipated that most matters can be addressed through phone calls
and/or emails. Certain matters, however, may require meetings at mutually
acceptable times and places.
10. Non-Solicitation: You agree for a period of two years following the
termination of your employment with the Company that you will not directly
or indirectly solicit any client or policyholder of the Company or its
affiliates or assist any other person or entity to do so or solicit,
recruit or hire or assist or encourage a third party to solicit, recruit or
hire the services of any current employee, agent or broker of the Company
or its affiliates.
11. Proprietary Information: You acknowledge that your position with the
Company has been one of high trust and confidence and that in the course of
your services to the Company you have had access to and contact with
Proprietary Information. You agree not to disclose to others, or use for
your benefit or the benefit of others, any Proprietary Information. For
purposes of this Agreement, 'Proprietary Information" shall mean
confidential information concerning the business, prospects and goodwill of
Allmerica Financial Corporation, the Company and/or its subsidiaries
/affiliates including, by the way of illustration and not limitation, all
confidential information (whether or not patentable and whether or not
copyrightable) owned, possessed or used by Allmerica Financial Corporation,
the Company and/or its subsidiaries/affiliates including, without
limitation, any confidential vendor information, policyholder information,
potential policyholder lists, trade secrets, reports, new product
information, technical data, software, software documentation, software
development, marketing or business plans, unpublished financial
information, budgetary/price/cost information, agent, broker, reinsurer,
employee or insured lists or confidential information involving policy
forms, litigation or claim matters, including potential claim matters.
12. Remedies: You acknowledge that any breach of the provisions of Sections 10
and 11 of this Agreement shall result in serious and irreparable injury to
the Company and/or its subsidiaries or affiliates for which the Company
cannot be adequately compensated by monetary damage alone. You agree,
therefore, that in addition to any other remedy which it may have, the
Company shall be entitled to specific performance of Sections 10 and 11 of
this Agreement by you and to seek both temporary and permanent injunctive
relief (to the extent permitted by law) without the necessity of proving
actual damages.
13. Removal from Continuity Plan: You hereby are removed as a participant in
the Allmerica Financial Corporation Employment Continuity Plan as of
September 18, 2003.
14. Outside Inquiries: The Company will adhere to its "No reference" policy by
responding to all inquiries regarding your employment with only dates of
employment and position(s) held and that Company policy precludes the
providing of any further information concerning our employment.
15. By-Law Indemnification: The Company hereby confirms that you are entitled
to indemnification pursuant to the terms and conditions of Section 8 of the
Company's By-Laws. A copy of said By-Laws is attached to this Agreement as
Exhibit A.
16. Release and Waiver: In consideration of this Agreement, you agree to
release and forever discharge the Company and its Affiliates, and all of
its or its Affiliates' past and present officers, directors, stockholders,
employees, agents and attorneys, whether directly or indirectly, and
whether individually or in their official capacities (collectively, the
"Releasees") from any and all debts, actions, causes of action, suits,
accounts, covenants, contracts, agreements, damages and any and all claims,
demands and liabilities whatsoever of every name and nature, whether
directly or indirectly, personally or derivatively through others, whether
known or unknown to, or whether suspected or unsuspected by you
(collectively, "claims"), both in law and in equity arising up to and
including the date you sign this agreement, subject to the exceptions
below.
This release of claims includes, but is not limited to, all claims of
prohibited discrimination under the Age Discrimination in Employment Act of
1967, as amended, 29 U.S.C., Section 621 et seq., Title VII of the Civil
Rights Act of 1964, as amended, 42 U.S.C. 2000e et seq., the Employee
Retirement Income Security Act of 1974 (ERISA) (except for any claims
arising from vested benefits) or any applicable laws of the United States
or the Commonwealth of Massachusetts, which you have against the Releasees
as of the date of execution of this Agreement, or ever had against the
Releasees from the beginning of the world through the date of execution of
this Agreement, and more particularly on account of your employment with
and your separation of employment from the Company, subject to the
exceptions below.
This release of claims also includes, but is not limited to, all claims of
intentional or negligent infliction of emotional distress, wrongful
discharge, breach of contract and all claims for severance pay, interest,
attorney's fees, costs and reinstatement of employment with the Company,
claims, if any, under the Company's Short Term Incentive Compensation Plan,
except to the extent set forth in paragraph 4 above and the Stock Plan, or
any other claim arising out of the separation of your employment with the
Company, subject to the exceptions below.
In further consideration of the Severance Compensation, you agree to waive
the right to assert any claim, demand, cause of action, complaint or other
action against the Releasees in any forum arising out of your employment,
or your separation from employment, with the Company, subject to the
exceptions below. For purposes of this Agreement, the term "Affiliate" will
mean a person or entity that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control
with the Company or Allmerica Financial Corporation.
However, this paragraph shall not affect any obligations of the Company
made pursuant to the terms of this Agreement; nor shall if affect any
insurance policies or financial products issued by the Company or its
affiliates which you currently own. In addition, this Release does not
waive any rights or claims that arise after the date this Release is
executed, any rights for vested benefits, any rights to seek unemployment
compensation or any rights to seek workers compensation.
THE FOREGOING MEANS THAT BY SIGNING THIS AGREEMENT YOU WILL HAVE WAIVED ANY
RIGHT YOU HAVE TO BRING A LAWSUIT OR MAKE ANY LEGAL CLAIM AGAINST ALLMERICA
FINANCIAL CORPORATION, THE COMPANY, OR ANY OF THE RELEASEES UP TO THE DATE
OF THE SIGNING OF THIS LETTER AGREEMENT, AND THAT YOU WILL HAVE RELEASED
THE RELEASEES OF ANY AND ALL CLAIMS OF ANY NATURE ARISING ON OR BEFORE THE
DATE OF THE SIGNING OF THIS AGREEMENT, SUBJECT TO THE EXCEPTIONS ABOVE.
17. Period for Review and Revocation:
(a) Review. You have twenty-one (21) days in which to consider this
Agreement prior to signing it. You acknowledge that you received a
copy of this Agreement on September 18, 2003. Once you have signed the
Agreement, you have seven (7) days in which to revoke it. This
Agreement does not become effective or enforceable until the 7-day
revocation period has expired.
(b) Effective Date. The Effective date of this Agreement will be the
eighth day after you sign it. If you do not notify the Company, in
writing, within the 7-day revocation period that you are exercising
your right of revocation, the Agreement will automatically become
effective.
18. Advice of Counsel: You acknowledge that you have been advised by the
Company to consult with an attorney prior to executing this Agreement.
19. Withholding: You acknowledge that any payments made pursuan to this
Agreement will be subject to appropriate federal and state withholding.
20. Arbitration: If any dispute shall arise between you and the Company with
reference to the interpretation of this Agreement or the rights of either
party with respect to any transaction under this Agreement, the dispute
shall be referred to arbitration and/or mediation under National Rules for
the Resolution of Employment Disputes of the American Arbitration
Association.
The arbitration shall take place in the Commonwealth of Massachusetts and
the arbitration proceedings are to be governed by the rules of the American
Arbitration Association, as applicable. The decision of the arbitrator
shall be final and binding upon both you and the Company and judgment upon
the award rendered by the arbitrator may be entered into any court having
jurisdiction thereof.
The expense of the arbitrator and of the arbitration shall be equally
divided between you and the Company. Arbitration is the sole remedy for
disputes arising under this letter agreement.
21. Voluntary Execution: Your signature below is an acknowledgment that you
have read this Agreement, understand it, and that you are entering into it
voluntarily.
22. Successors and Assigns: This Agreement shall be binding upon you, your
heirs, executors, administrators and assigns and upon the Company, its
successors and assigns.
23. Severability: The invalidity or unenforceability of any provision hereof
shall in no way affect the validity or enforceability of any other
provision. Wherever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable
law, but if any provisions hereof shall be prohibited by or invalid under
such law, that provision shall be ineffective only to the extent of such
prohibition or invalidity without invalidating or nullifying the remainder
of that provision or any other provision of this Agreement.
24. Massachusetts Law: This Agreement shall be executed as an agreement under
seal and it shall be governed by the laws of the Commonwealth of
Massachusetts, and shall be binding upon and inure to the benefit of you
and the Company and our respective agents, representatives, assigns, heirs,
executors, successors and administrators.
Very truly yours,
FIRST ALLMERICA FINANCIAL
LIFE INSURANCE COMPANY
By: /s/Bruce C. Anderson
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Bruce C. Anderson
Vice President
I knowingly understand and voluntarily agree to, and accept the terms and
conditions set forth above.
/s/ Robert P. Restrepo, Jr.
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Robert P. Restrepo, Jr.
Date: October 10, 2003
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