Exhibit 10.32
ALLMERICA FINANCIAL CORPORATION
CONVERTED STOCK AGREEMENT
This Converted Stock Agreement (the "Agreement") is made as of this 30th
day of January, 1998, by and between ALLMERICA FINANCIAL CORPORATION, a Delaware
corporation (the "Company"), and _______________ ("the Participant").
P R E A M B L E
WHEREAS, pursuant to the terms of the Allmerica Financial Corporation Long
Term Stock Incentive Plan (the "Plan"), the Committee (as defined in the Plan)
has agreed to give to the Participant subject to the terms and conditions of the
Plan and this Agreement, one share of the Company's common stock for each $39.47
of the second and/or third installment of the 1997 Allmerica Financial Long-Term
Performance Unit Plan (the "1997 Awards") and/or the third installment of the
1996 Allmerica Financial Long-Term Performance Unit Plan (the "1996 Award") that
the Participant elects to convert into Allmerica Financial Corporation stock
(the "Restricted Stock") up to a maximum of _______ shares.
WHEREAS, the Restricted Stock will be subject to certain restrictions on
sale and transfer and other terms and conditions as set forth in this Agreement.
NOW, THEREFORE, for and in consideration of the foregoing and the mutual
covenants and promises hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. Transfer of Restricted Stock. The Company will transfer to Participant
----------------------------
a certificate representing _______ shares of Restricted Stock which certificate
reflects the amount of his 1997 Award and 1996 Award that the Participant
elected to be converted, provided the Participant has delivered to the Company
the following:
a) a completed election form in the form attached hereto as Exhibit
A; and,
b) a fully executed copy of this Agreement.
2. Waiver of Claim. The Participant acknowledges and agrees that to the
---------------
extent he converts the 1997 Awards or any portion thereof and/or converts the
1996 Award or any portion thereof, he has irrevocably waived any claim for
payment under the 1996 and/or 1997 Allmerica Financial Long-Term Performance
Unit Plan to the extent of such election and agrees to look solely to the terms
of this Agreement to determine his rights to the Restricted Stock issue in lieu
of the 1997 Awards or any portion thereof and/or in lieu of the 1996 Award or
any portion thereof.
In the event the Participant elects to convert the second and/or third
installment of the 1997 Awards in full and/or elects to convert the 1996 Award
in full and such conversion(s) result in the award of partial share(s), such
conversion(s) will be rounded up to the next full share. To the
-1-
extent the Participant elects to convert any installment in part, such
conversion(s) shall be rounded downward to the next whole share amount.
3. Vesting and Company's Right to a Return of the Restricted Stock.
---------------------------------------------------------------
(a) Vesting. The Restricted Stock shall be one hundred (100%) percent
-------
vested on the date the Participant has completed three (3) additional years of
active service with the Company or one of its subsidiaries or affiliates (the
Company and its subsidiaries and affiliates hereinafter referred to as
"Allmerica"). The three (3) years of additional active service will commence on
the date of this Agreement and be determined pursuant to the terms of this
Agreement.
(b) Termination. Upon the termination of Participant's employment
-----------
with Allmerica for whatever reason, whether with or without cause, for good
reason or otherwise, any non-vested Restricted Stock shall be returned to the
Company for no consideration.
(c) Retirement. In the event that the Participant retires prior to
----------
the Restricted Stock becoming vested, the Restricted Stock shall be returned to
the Company for no consideration. Retirement for purposes of this Agreement
shall have the same meaning as it does in the Plan. However, the pro rata
vesting provision in the event of retirement or early retirement as set forth in
Section 7(d) of the Plan is not applicable to the Restricted Stock.
(d) Disability. In the event Participant is placed in a long term
----------
disability status (as such term is defined in the Plan) then any time during
which Participant is in such status shall not be counted in determining whether
Participant has provided the required amount of active service for purpose of
vesting of the Restricted Stock. Notwithstanding any provision in the Plan to
the contrary, if the Participant's employment with Allmerica is terminated due
to disability before the Restricted Stock is fully vested, the Participant shall
return to the Company, for no consideration, the Restricted Stock.
(e) Death. In the event Participant dies prior to the Restricted
-----
Stock becoming fully vested, the Company's right to have the Restricted Stock
returned to the Company for no consideration shall lapse. Thus, notwithstanding
any provisions to the contrary in this Agreement, in the event of Participant's
death, the Restricted Stock shall become fully vested.
(f) The sale of any portion of the Restricted Stock. In the event
-----------------------------------------------
Participant sells, transfers or encumbers all or any portion of the Restricted
Stock before such shares are fully vested, the Restricted Stock shall be
returned to the Company for no consideration. The Participant agrees to inform
the Company in the event the Restricted Stock, or any portion thereof, is sold,
transferred or encumbered prior to such stock becoming fully vested.
4. Proof of Ownership. Annually the Participant shall deliver to the
------------------
Company proof that the Participant has not sold, transferred or encumbered at
the end of each anniversary of the date Participant received the Restricted
Stock from the Company evidence that Participant owns directly and without any
liens or encumbrances the Restricted Stock. This requirement to deliver proof
of ownership of the Restricted Stock shall continue until the Restricted Stock
is fully vested. If
-2-
Participant fails to deliver proof that he still owns in his own account the
Restricted Stock, then the Company shall, at its option, be entitled to have the
Restricted Stock returned to the Company for no consideration. The Company shall
have this right in the event Participant fails to deliver within thirty (30)
days of the respective anniversary evidence that Participant still owns the
Restricted Stock. Evidence of ownership of the Restricted Stock shall be
fulfilled by delivering to the Company a certification in the form of Exhibit B
attached hereto. Notwithstanding the foregoing, as long as the Restricted Stock
is subject to the terms and conditions of a certain Deferral Agreement between
the Participant and the Company (the "January 30 Deferral Agreement") the
provision of this section shall not be applicable.
5. Shares Received in Certain Corporate Transactions. The terms of this
-------------------------------------------------
Agreement shall apply to any stock or securities received by Participant in
exchange for the Restricted Stock pursuant to a plan of merger, consolidation,
recapitalization or reorganization of the Company. The terms of this Agreement
shall also apply to any security received as a result of a stock split or stock
dividend with respect to the Restricted Stock and such securities shall become
Restricted Stock pursuant to the terms of this Agreement.
6. Stock Legend. The Company and Participant agree that all certificates
------------
representing the Restricted Stock that at any time are subject to the provisions
of this Agreement will have endorsed upon them in bold-faced type a legend in
substantially the following form:
RESTRICTIONS ON THE OWNERSHIP RIGHTS OF THE STOCK REPRESENTED BY THIS
CERTIFICATE HAVE BEEN IMPOSED PURSUANT TO A RESTRICTED STOCK AGREEMENT
DATED JANUARY 30, 1998. A COPY OF THE RESTRICTED STOCK AGREEMENT IS ON
FILE AT THE PRINCIPAL OFFICE OF THE COMPANY AND WILL BE FURNISHED WITHOUT
CHARGE TO THE HOLDER OF THIS CERTIFICATE UPON RECEIPT BY THE COMPANY AT ITS
PRINCIPAL PLACE OF BUSINESS OF A WRITTEN REQUEST FROM THE HOLDER REQUESTING
SUCH COPY.
Notwithstanding the foregoing, the Company and the Participant agree
that as long as the January 30, 1998 Deferral Agreement is in effect, the
Participant shall not receive a certificate for the Restricted Stock.
7. Notices. Any notice required to be given hereunder will be deemed to
-------
be duly given on the date of delivery if delivered in person or on the date of
mailing if mailed by registered or certified mail, postage prepaid, return
receipt requested, to the party or parties that are to receive such notice at
the addresses indicated on the signature page of this Agreement. The address of
Participant or the Company may be changed only by giving written notice to the
other party of such change of address.
8. Taxes. To the extent the lapse of restrictions results in the receipt
-----
of compensation by Participant for tax purposes, the Company shall withhold from
any cash compensation then or thereafter payable to Participant any tax required
to be withheld by reason thereof. To the extent the Company determines that
such cash compensation is or may be insufficient to fully satisfy such
withholding requirement, Participant shall deliver to the Company cash in an
amount determined
-3-
by the Company to be sufficient to satisfy any such withholding requirement. The
Company will not deliver to the Participant an unrestricted certificate for any
shares until the Participant delivers to the Company cash sufficient to satisfy
all withholding requirements imposed on the Company or a subsidiary of the
Company. Notwithstanding the foregoing with the consent of the Company, the
Participant may sell fully vested shares in an amount necessary to satisfy the
Participant's withholding requirement provided the proceeds from such sale are
delivered directly to the Company to satisfy Participant's withholding
requirements.
9. Stock Power and Retention of Certificates. The Company may require
-----------------------------------------
Participant to execute and deliver to the Company a stock power in blank with
respect to the Restricted Stock and may, in its sole discretion, determine to
retain possession of or escrow the certificate for the Restricted Stock. The
Company shall have the right, in its sole discretion, to exercise such stock
power in the event that the Company becomes entitled to the non-vested
Restricted Stock pursuant to the terms of this Agreement. Notwithstanding
retention of such certificate by the Company, Participant shall have all rights
(including dividend and voting rights) with respect to the Restricted Stock
represented by such certificate. Notwithstanding the foregoing, as long as the
January 30, 1998 Deferral Agreement is in effect, this provision shall not be
applicable.
10. January 30, 1998 Deferral. The Participant and the Company
-------------------------
acknowledge that they have entered into a Deferral Agreement dated January 30,
1998, deferring the Participant's receipt of the Restricted Stock in certain
circumstances (the "January 30, 1998 Deferral Agreement").
11. Entire Agreement; Counterparts. This Agreement contains the entire
------------------------------
understanding between the parties concerning the subject contained in this
Agreement. Except for the Agreement, there are no representations, agreements,
arrangements, or understandings, oral or written, between or among the parties
hereto, relating to the subject matter of this Agreement, that are not fully
expressed herein. This Agreement may be signed in one or more counterparts, all
of which shall be considered one and the same agreement.
12. Further Assurances. Each party to this Agreement agrees to perform
------------------
all further acts and to execute and deliver all further documents as may be
reasonably necessary to carry out the intent of this Agreement.
13. Severability. In the event that any of the provisions, or portions
------------
thereof, of this Agreement are held to be unenforceable or invalid by any court
of competent jurisdiction, the validity and enforceability of the remaining
provisions, or portions thereof, will not be affected, and such unenforceable
provisions shall be automatically replaced by a provision as similar in terms as
may be valid and enforceable.
14. Construction. Whenever used in this Agreement, the singular number
------------
will include the plural, and the plural number will include the singular, and
the masculine or neuter gender shall include the masculine, feminine, or neuter
gender. The headings of the Sections of this Agreement have been inserted for
purposes of convenience and shall not be used for interpretive purposes.
15. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Delaware.
-4-
16. Successors. The provisions of this Agreement will benefit and will be
----------
binding upon the assigns, successors in interest, personal representatives,
estates, heirs and legatees of each of the parties hereto.
17. Specific Performance. Each of the parties hereto acknowledges and
--------------------
agrees that in the event of any breach of this Agreement, the nonbreaching
parties would be irreparably harmed and could not be made whole by monetary
damages. Each of the parties hereto accordingly agrees to waive the defense in
any action for injunction or specific performance that a remedy at law would be
adequate and that the parties hereto, in addition to any other remedy to which
they may be entitled at law or in equity, shall be entitled to an injunction or
to compel specific performance of this Agreement.
18. Amendment. This Agreement may only be amended by the written consent
---------
of all of the parties to this Agreement at the time of such amendment.
19. Facsimile Signature. The Company may execute this Agreement by means
-------------------
of a facsimile signature.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as
of the date first above written.
ADDRESS: ALLMERICA FINANCIAL CORPORATION
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By:
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ---------------------------------
Name: ▇▇▇▇ ▇. ▇'▇▇▇▇▇
-------------------------------
Title: President and CEO
------------------------------
ADDRESS:
------------------------------------
Exhibit B
RESTRICTED STOCK CERTIFICATION
I, ________________________________________________________________, hereby
certify to Allmerica Financial Corporation (the "Company") that the Restricted
Stock (as that term is defined in the certain Restricted Stock Agreement between
the Company and the undersigned dated January 30, 1998) are still owned directly
by me and that during the period following my acquisition of the Restricted
Stock I have not transferred or encumbered in any manner the Restricted Stock,
and that such Shares as of the date of this Certification are owned directly by
me without any encumbrances of any kind.
This Certification is given under the penalties of perjury.
--------------------------------
Participant
Date:
---------------------------