Exhibit 10.49
Employment Agreement
AGREEMENT (the "Employment Agreement" or this "Agreement") dated as of the 1st
day of November, 2002, between First Allmerica Financial Life Insurance Company,
a corporation having its principal office at 000 Xxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxxxxxx 00000 (the "Company") and J. Xxxxxxx Xxxxx ("Employee") residing
at 000 Xxxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000.
The Company and Employee hereby agree as follows:
1. Employment. The Company hereby employs Employee and Employee
hereby accepts employment upon the terms and conditions
hereinafter set forth. (As used throughout this Agreement,
"Company" shall mean and include any and all of its present and
future subsidiaries and affiliates.) Employee warrants that
Employee is free to enter into and fully perform this Agreement
and is not subject to any employment, confidentiality,
non-competition or other agreement which would restrict
Employee's performance under this Agreement.
2. Duties. Employee shall devote Employee's full time to the
performance of services as a member of the newly established
Office of the Chairman with duties as determined by the Chairman
and as General Counsel of the Company and its subsidiaries and
affiliates and provide such other services as may from time to
time be designated by the Chairman of the Board of Allmerica
Financial Corporation ("AFC") or the new permanent President and
Chief Executive Officer of AFC, (the "Successor Chief
Executive"). During the term of this Agreement, Employee's
services shall be completely exclusive to the Company and
Employee shall devote Employee's entire time, attention and
energies to the business of the Company and the duties to which
the Company shall assign him from time to time. Employee agrees
to perform Employee's services well and faithfully and to the
best of Employee's ability and to carry out the policies and
directives of the Company. Employee agrees to take no action
prejudicial to the interests of the Company during Employee's
employment hereunder. Employee shall be based in Worcester,
Massachusetts but Employee may be required from time to time to
perform duties hereunder for reasonably short periods of time
outside said area.
3. Term. The term of this Agreement shall begin on November 1, 2002
and shall end on December 31, 2003 (the "Term"). The Company and
the Employee may by mutual written agreement extend the Term of
this Agreement.
4. Compensation.
i) Base Salary: During the period of Employee's employment
under this Agreement, the Company shall pay Employee an
annual salary rate of $375,000.00 payable bi-weekly, subject
thereafter to periodic review by the Chairman of the Board
and the Successor Chief Executive and the AFC Compensation
Committee, and payable in accordance with the Company's
payroll policy as in effect from time to time ("Base
Salary").
ii) Incentive Compensation: If an incentive or bonus
compensation program is made available to employees of the
Company generally, Employee shall be entitled during the
term hereof to participate in such program in accordance
with the terms thereof, as such terms may be modified or
amended by the Company from time to time; provided, however,
that nothing contained herein shall obligate the Company to
adopt or continue such an incentive or bonus compensation
program. The Company hereby acknowledges that the Employee
is a participant in the 2002 Short Term Incentive
Compensation Plan and has a target goal of sixty percent
(60%) of $325,000.00. Notwithstanding the provisions of the
2002 Short Term Incentive Compensation Plan, the Company
agrees that your 2002 Short Term Incentive Compensation
Award will be no less than $125,000.00 provided the business
unit contribution from the Risk Management is at least $140
million dollars (the "2002 Bonus"). The Employee shall
continue as a participant in the 2003 Short Term Incentive
Compensation Plan at a target goal of seventy-five percent
(75%) of $375,000.00.
iii)AFC Stock Plan: Employee shall be eligible to participate
in the Company's Long Term Stock Incentive Plan for 2003.
The terms of such participation shall be determined in
January of 2003.
5. Walk Away Benefit. Between November 1, 2002 and July 1, 2003,
the Employee, upon thirty (30) days written notice to the
Company, terminate his employment with the Company, for any
reason or for no reason, and Employee shall receive a severance
benefit equal to $450,000.00, provided Employee executes a
mutually acceptable Severance Agreement, which agreement would
be in the same form required of other senior officers generally
and contain a general release in favor of the Company.
6. Waiver of January 13, 2000 Walk Away Benefit. Employee hereby
agrees that the "walk away" benefit set forth in section 5 of a
certain letter dated January 13, 2000 from Xxxxx X. Xxxxxxxx to
Employee is hereby waived and of no further force or effect.
7. Severance Benefit. (a) If at any time the Company terminates
Employee's employment pursuant to the provisions of Section
12(e), or the Employee terminates his employment pursuant to the
provisions of Section 12(f), then Employee shall receive a
severance benefit equal to $450,000.
(b) No severance benefit shall be payable under this Section 7
unless Employee executes a mutually acceptable severance
agreement, which agreement would be in the same form required of
other senior officers generally and include a general release in
favor of the Company.
(c) In the event Employee's employment is terminated pursuant to
the terms of this section or Section 5, Employee shall be
entitled to Executive Outplacement Assistance.
(d) No severance agreement required under this Agreement shall
require Employee to be subject to any non-competition,
confidentiality, non-disclosure, non- solicitation, or services
agreement except as set forth in this Agreement or to the extent
Employee has previously agreed in writing to be subject to any
such provisions.
8. Retention Bonus. If Employee is actively employed at December
31, 2003, Employee shall receive a retention bonus equal to
$350,000.00,(the "Retention Payment").
9. Expenses. Employee shall be entitled to reimbursement for
expenses reasonably incurred in connection with the performance
of Employee's duties hereunder in accordance with such
procedures as the Company may establish from time to time.
10. Vacation During Employment. Employee shall be entitled to four
(4) weeks vacation during each calendar year.
11. Additional Benefits. During the term hereof and subject to any
contribution therefor generally required of employees of the
Company, Employee shall be entitled to participate in any and
all employee benefit plans from time to time in effect for
employees of the Company generally, but the Company shall not be
required to establish any such program or plan. Such
participation shall be subject to (i) the terms of the
applicable plan documents, (ii) generally applicable Company
policies and (iii) the discretion of the Board of Directors or
any administrative or other committee provided for in or
contemplated by such plan. The Company may alter, modify, add to
or delete its employee benefit plans at any time as it, in its
sole judgment, determines to be appropriate, without recourse by
the Employee.
12. Termination of Employment. Employee's employment may be
terminated prior to the expiration of the term of this Agreement
under the following circumstances:
(a) By the Company in the event of Employee's failure or
refusal to satisfactorily perform the services required
of Employee hereby, or to carry out any proper direction
of the Board of Directors with respect to the services
to be rendered by Employee hereunder or the manner of
rendering such services, or
Employee's willful misconduct in the performance of Employee's
duties hereunder, or Employee's commission of a felony;
(b) By the Company upon 30 days' notice to Employee if
Employee should be prevented by illness, accident or
other disability from discharging Employee's duties
hereunder for one or more periods totaling three months
during any twelve-month period;
(c) Except as otherwise provided in Section 12(a), by either
the Company or Employee for any material breach by the
other of the terms hereof, but only upon 30 days'
written notice to the other specifying the breach relied
on for such termination, and only if such breach has not
been cured within such 30-day period; or
(d) In the event of Employee's death during the term of
Employee's employment, the Company's obligation to pay
further compensation hereunder shall cease forthwith,
except that Employee's legal representative shall be
entitled to receive Employee's fixed compensation for
the period up to the last day of the month in which such
death shall have occurred.
(e) By Company Other Than for Cause. Subject to the
provisions of Section 7, Company may terminate
Employee's employment hereunder other than for Cause at
any time upon notice to Employee.
(f) By Employee for Good Reason. After July 1, 2003, the
Employee may terminate his employment hereunder for Good
Reason, upon sixty (60) days written notice to Company
setting forth in reasonable detail the nature of such
Good Reason. The following shall constitute Good Reason
for termination by Employee:
(i) Material failure of Company to provide the
Employee the Base Salary and benefits in
accordance with the terms of Sections 4, 8, 10 and
11 hereof.
(ii) Material changes in Employee's responsibilities or
authority.
In the event of termination in accordance with this Section
12(f), Employee shall be entitled to the benefits set forth in
Section 7.
13. Confidentiality. Except in performance of services for the
Company, Employee shall not, either during the period of
Employee's employment with the Company or thereafter, use for
Employee's own benefit or disclose to or use for the benefit of
any person outside the Company, any information concerning any
Intellectual Property, or other confidential or proprietary
information of the Company, whether Employee has such
information in Employee's memory or embodied in writing or other
tangible form. All originals and copies of any of the foregoing,
however and
whenever produced, shall be the sole property of the Company,
not to be removed from the premises or custody of the Company
without in each instance first obtaining authorization of the
Company, which authorization may be revoked by the Company at
any time. Upon the termination of Employee's employment in any
manner or for any reason, Employee shall promptly surrender to
the Company all copies of any of the foregoing, together with
any documents, materials data, information and equipment
belonging to or relating to the Company's business and in
Employee's possession, custody or control, and Employee shall
not thereafter retain or deliver to any other person any of the
foregoing or any summary or memorandum thereof.
14. Non-Competition Covenants:
14.1 For as long as Employee is receiving Base Salary payments
pursuant to the terms of this Agreement, Employee may not render
services to or be otherwise employed by or associated with, or
(except as a holder of a stock interest not to exceed 1 percent
in the securities of publicly held and traded companies)
interested in any person or entity which sells services or
products competitive with those offered by Company.
14.2 If Employee violates any of the covenants or agreements under
this Section 14, Company shall be entitled to an accounting and
repayment of all profits, compensation, commissions,
remuneration, or other benefits that Employee directly or
indirectly has realized and/or may realize as a result of,
growing out of, or in connection with, any such violation. These
remedies shall be in addition to, and not in limitation of, any
other rights or remedies to which Company is or may be entitled.
14.3 Employee and the Company are of the belief that the restrictions
set forth in Section 14 are reasonable in view of the nature of
the business the Company is engaged and proposes to engage, the
state of its business development and Employee's knowledge of
this business. However, if any provision(s) of this Section 14
should be adjudged unreasonable in any judicial proceeding, then
such unreasonable provision(s) shall be modified so that this
non-competition provision may be adjudged to be reasonable.
15. Non-Solicitation Agreement. Employee agrees and covenants that
Employee will not, unless acting with the Company's express
written consent, directly or indirectly, during the term of this
Agreement or for a period of two (2) years thereafter, solicit,
entice away or interfere with the Company's contractual
relationships with any customer, client, broker, officer or
employee of the Company.
16. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been given upon delivery
or three days after having been mailed by first-class,
registered or certified mail, or the next day after having been
sent by overnight mail, as follows: (a) if to Employee, at the
address shown at the
head of this Agreement or to such other person(s) or address(es)
as Employee shall have furnished to the Company in writing; and
(b) if to the Company, Attention: Chairman of the Board, with a
copy to Xxxxx Xxxxxxxx or to such other person(s) or address(es)
as the Company shall have furnished to the Employee in writing.
17. Assignability. In the event that the Company shall be merged
with, or consolidated into, any other corporation, or in the
event that it shall sell and transfer substantially all of its
assets to another corporation or entity, the terms of this
Agreement shall inure to the benefit of, and be assumed by, the
corporation or entity resulting from such merger or
consolidation, or to which the Company's assets shall be sold
and transferred. This Agreement shall not be assignable by
Employee.
18. Entire Agreement. This Agreement contains the entire agreement
between the Company and Employee with respect to the subject
matter hereof and there have been no oral or other prior
agreements of any kind whatsoever as a condition, precedent or
inducement to the signing of this Agreement or otherwise
concerning this Agreement or the subject matter hereof.
19. Remedies.
19.1 Subject to Section 19.2, any claim or controversy arising out of
or relating to this Agreement, including (without limitation) a
claim by Company that Employee has violated any one or more of
the restrictions set forth in Sections 13, 14 or 15, shall be
settled by arbitration before a single arbitrator in Boston,
Massachusetts in accordance with the Commercial Arbitration
Rules of the American Arbitration Association. If the arbitrator
finds that a violation of the foregoing restrictions exits or is
threatened he shall prescribe appropriate relief which may
include an award that Employee desist from such violation,
whether or not such an order would issue, in the circumstances,
under the equity powers of a court. Judgment upon the award
rendered by the arbitrator may be entered in any court of
competent jurisdiction.
19.2 Company shall have the right, which may be exercised in lieu of
or in addition to the procedure set forth in Section 19.2, to
submit a claim that Employee has violated any one or more of the
restrictions set forth in Sections 13, 14 or 15 to any court of
competent jurisdiction and Company will be entitled, in addition
to any other remedies available to it from such court, to obtain
injunctive relief from such court to enforce the terms of this
Agreement. Employee, upon receipt of written notice of the
institution of proceedings in such court, hereby agrees to
submit to the jurisdiction of such court.
20. Amendments. This Agreement may not be amended, nor shall any
change, waiver, modification, consent or discharge be effected
except by written instrument executed by the Company and
Employee.
21. Severability. If any part of any term or provision of this
Agreement shall be held or deemed to be invalid, inoperative or
unenforceable to any extent by a court of competent
jurisdiction, such circumstance shall in no way affect any other
term or provision of this Agreement, the application of such
term or provision in any other circumstances, or the validity or
enforceability of this Agreement.
22. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the law of the Commonwealth of
Massachusetts, without regard to conflict of law principles.
IN WITNESS WHEREOF, the parties have executed or caused to be executed this
Agreement as of the date first above written,
First Allmerica Financial Life Insurance
Company
[Seal] By: /s/ J. Xxxxxxx Xxxxx
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Its
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J. Xxxxxxx Xxxxx, Employee
