Exhibit 10.50
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 Xxxxxx X. Xxxxx, III ("Employee")
residing at 00 Xxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxx Xxxxxx 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 President of Allmerica Asset Accumulation with
responsibility for Corporate Services, Allmerica Financial
Services, Corporate Finance and Allmerica Asset Management 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 by the new permanent President and Chief
Executive Officer of AFC. 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 $450,000.00 payable bi-weekly, and
payable in accordance with the Company's payroll policy as
in effect from time to time ("Base Salary").
ii) Retention Payment/Incentive Compensation: If the Employee is
actively at work between November 1, 2002 and March 7, 2003,
the Employee will receive, on March 7, 2003, a payment in
the amount of $200,000.00 (the "March 7, 2003 Payment")
provided the business unit contribution from Risk Management
is at least $140 million dollars. If the Employee receives
the March 7, 2003 Payment, the Employee waives the right to
receive any payment under the Company's 2002 Short Term
Incentive Compensation Plan. Notwithstanding the foregoing,
the Employee shall be a participant in the 2003 Short Term
Incentive Compensation Plan and have a target goal of ninety
percent (90%) of $450,000.00.
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. Severance Benefit. If between November 1, 2002 and the date
which is thirty (30) days prior to a new President and Chief
Executive Officer of AFC commences his employment, Employee's
employment is terminated pursuant to the provisions of Section
10(e) or Employee terminates his employment pursuant to the
provisions of Section 10(f), between November 1, 2002 and the
date which is 90 days after the new President and Chief
Executive Officer of AFC commences his employment, Employee
shall receive a severance benefit equal to $450,000.00, provided
Employee executes a severance agreement in the form attached
hereto as Exhibit A (the "Severance Agreement").
If the Company terminates Employee's employment pursuant to the
provisions of Section 10(e) less than thirty (30) days prior to
the new President and Chief Executive Officer's commencement of
his employment, if the new President and Chief Executive Officer
terminates Employee's employment pursuant to the provisions of
Section 10(e) or Employee terminates his employment pursuant to
the provisions of Section 10(g) after the new President and
Chief Executive Officer of AFC has commenced his employment,
Employee shall receive a severance benefit equal to $600,000.00,
provided Employee executes the Severance Agreement.
In the event Employee's employment is terminated pursuant to the
terms of this section, Employee shall be entitled to Executive
Outplacement Assistance as set forth in Exhibit B.
6. Retention Bonus. If Employee is actively employed at December
31, 2003, Employee shall receive a retention bonus equal to
$500,000.00.
7. 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.
8. Vacation During Employment. Employee shall be entitled to four
(4) weeks during each calendar year.
9. 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.
10. 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, refusal
or inability satisfactorily to 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 10(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 5, Company may terminate Employee's employment
hereunder other than for Cause at any time upon notice to
Employee.
(f) By Employee for Good Reason. The Employee may terminate his
employment hereunder for Good Reason, upon 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, 6, 8 and 9 hereof.
(ii) Material changes in Employee's responsibilities or
authority.
In the event of termination in accordance with this Section
10(f), Employee shall be entitled to the benefits set forth in
the applicable provisions of Section 5.
(g) By Employee for Any Reason. The Employee may terminate his
employment hereunder for any reason at any time between the
91st and 120th day after the new permanent President and
Chief Executive Officer of AFC commences his employment. In
the event of termination in accordance with this Section
10(g), Employee shall be entitled to the benefits set forth
in the applicable provisions of Section 5.
11. Confidentiality. Except in performance of services for the
Company, Employee shall not, either during the period of
Employees 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.
12. Non-Competition Covenants:
12.1 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.
12.2 If Employee violates any of the covenants or agreements under
this Section 12, 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.
12.3 Employee and the Company are of the belief that the restrictions
set forth in Section 12 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 12
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.
13. 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.
14. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been given three days
after having been delivered or 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 the General Counsel, or to such other
person(s) or address(es) as the Company shall have furnished to
the Employee in writing.
15. 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.
16. 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.
17. Remedies.
17.1 Subject to Section 17.2, 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 11, 12 or 13, 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.
17.2 Company shall have the right, which may be exercised in lieu of
or in addition to the procedure set forth in Section 17.2, to
submit a claim that Employee has violated any one or more of the
restrictions set forth in Sections 11, 12 or 13 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.
18. 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.
19. Severability. If any part of any term or provision of this
Agreement shall be hold 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.
20. 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/ Xxxxxx X. Xxxxx, III
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Its
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Xxxxxx X. Xxxxx, III, Employee
