FORM 11-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: December 31,1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from:___________to____________
Commission file number: 1-13754
THE ALLMERICA FINANCIAL
AGENTS' RETIREMENT PLAN
(Full title of the plan)
ALLMERICA FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 04-3263626
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
440 Lincoln Street, Worcester, Massachusetts 01653
(Address of principal executive offices)
(Zip Code)
(508) 855-1000
(Registrant's telephone number, including area code)
_________________________________________________________________
(Former name, former address and former fiscal year, if changed
since last report)
<PAGE>
The Allmerica Financial
Agents' Retirement Plan
Financial Statements
and Additional Information
December 31, 1999 and 1998
<PAGE>
The Allmerica Financial Agents' Retirement Plan
December 31, 1999 and 1998
TABLE OF CONTENTS
Report of Independent Accountants 1
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4
Additional Information*
Schedule H - Schedule of Assets Held for Investment Purposes 9
* Other schedules required by the Department of Labor Rules and Regulations
on reporting and disclosure under the Employee Retirement Income Security
Act of 1974, as amended, have been omitted because they are not
applicable.
<PAGE>
Report of Independent Accountants
To the Participants and Administrator of
The Allmerica Financial Agents' Retirement Plan
In our opinion, the accompanying statements of net assets available for
benefits and the related statements of changes in net assets available for
benefits present fairly, in all material respects, the net assets available
for benefits of The Allmerica Financial Agents' Retirement Plan (the "Plan")
at December 31, 1999 and December 31, 1998, and the changes in net assets
available for benefits for the years then ended, in conformity with
accounting principles generally accepted in the United States. These
financial statements are the responsibility of the Plan's management; our
responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these statements in accordance
with auditing standards generally accepted in the United States, which
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets
held for investment purposes is presented for the purpose of additional
analysis and is not a required part of the basic financial statements but is
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974. This supplemental schedule is the
responsibility of the Plan's management. The supplemental schedule has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
June 23, 2000
<PAGE>
The Allmerica Financial Agents' Retirement Plan
Statements of Net Assets Available for Benefits
At December 31,
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Assets
Investments with First Allmerica Financial
Life Insurance Company:
Investments, at fair value:
Separate Investment Accounts:
Growth Stock Fund $ 25,008,806 * $ 21,936,223
Indexed Stock Fund 18,776,257 * 16,293,942
Select Aggressive Growth Fund 12,771,951 * 10,115,804
Select Growth Fund 9,465,860 * 4,381,771
Select International Equity Fund 9,454,865 * 7,449,506
Balanced Fund 4,895,066 6,256,959
Money Market Fund 4,523,026 1,898,982
Select Capital Appreciation Fund 1,861,541 963,535
Diversified Bond Fund 927,573 999,967
Government Securities Fund 278,080 161,757
----------- -----------
87,963,025 70,458,446
Investments, at contract value:
Fixed Interest Fund 8,732,450 * 9,321,404
Participant Loans 3,712,241 3,161,891
Other 292,647 342,976
----------- -----------
100,700,363 83,284,717
----------- -----------
Investments with Allmerica Trust
Company, N.A.:
Allmerica Financial Corporation
Stock Fund, at fair value 12,439,219 * 12,107,060
Employer's contribution receivable 3,235,686 3,112,396
Employee's contribution receivable 483,543 390,064
----------- -----------
3,719,229 3,502,460
----------- -----------
Net assets available for benefits $116,858,811 $ 98,894,237
=========== ===========
* Amount represents five percent or more of net assets available for
benefits at December 31, 1999.
</TABLE>
The accompanying notes are an integral part of these financial
statements.
2
<PAGE>
The Allmerica Financial Agents' Retirement Plan
Statements of Changes in Net Assets Available for Benefits
For the Years Ended December 31,
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Investment Income:
Net appreciation (depreciation) of:
Separate Investment Accounts $ 18,192,482 $ 11,402,730
Allmerica Financial Corporation
Stock Fund (221,188) 953,903
Interest and dividend income 887,019 944,158
----------- -----------
18,858,313 13,300,791
----------- -----------
Contributions:
Employer contributions 3,383,880 3,413,706
Employee contributions 3,583,773 2,891,788
Reallocated forfeitures (44,685) (103,510)
----------- -----------
6,922,968 6,201,984
----------- -----------
Total additions 25,781,281 19,502,775
----------- -----------
Benefit payments (7,823,507) (5,650,700)
Loan fees - (9,886)
Purchase of life insurance and annuity
contracts 6,800 15,650
----------- -----------
Total deductions (7,816,707) (5,644,936)
----------- -----------
Net increase during year 17,964,574 13,857,839
----------- -----------
Net assets available for benefits,
beginning of year 98,894,237 85,036,398
----------- -----------
Net assets available for benefits,
end of year $116,858,811 $ 98,894,237
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial
statements.
3
<PAGE>
The Allmerica Financial Agents' Retirement Plan
Notes to Financial Statements
NOTE 1 - Description of plan
The following description of The Allmerica Financial Agents' Retirement Plan
("the Plan") is provided for general informational purposes only. More
complete information is provided in the Summary Plan Description, which is
available from the Plan Administrator.
General
The Plan is a defined contribution plan for certain employees and insurance
agents of First Allmerica Financial Life Insurance Company ("FAFLIC", "the
Sponsor" or "Company") and Allmerica Financial Life Insurance and Annuity
Company ("AFLIAC"). FAFLIC and AFLIAC are wholly-owned subsidiaries of
Allmerica Financial Corporation ("AFC").
The Plan is administered by the Sponsor ("the Plan Administrator") and is
subject to the provisions of the Department of Labor's Rules and Regulations
for Reporting and Disclosure under the Employee Retirement Income Security
Act of 1974, as amended (ERISA). The Trustee of the Plan is Investors
Bank & Trust Company. The Plan's assets are held by the Sponsor and
Allmerica Trust Company, N.A., a related party.
On January 1, 1999, the Plan changed its recordkeeper from Allmerica
Financial Services to Hewitt Associates LLC.
Eligibility
Employees are eligible for participation in the Plan on the first day of
employment with the Company, as defined by the Plan document.
Employer contributions
For each Plan year, the employer will contribute a minimum contribution
of 7% of the total eligible compensation paid all eligible participants
during the year comprised of up to 2% as a 401(k) employer contribution
with the remainder comprised of an employer profit share contribution.
Employees are eligible to receive this contribution following completion of
one year of service, as defined by the Plan document. Based on the
Sponsor's before-tax profits and the discretion of the Sponsor's Board of
Directors, the Sponsor may contribute more than the 7% contribution, subject
to the established limitations under ERISA. Employer contributions are
allocated to the same investment vehicles as the employee contributions.
Reallocated forfeitures
Forfeitures of employer contributions related to nonvested terminated
employees are transferred to the Money Market Fund where they remain until
the Plan Administrator reallocates them to the remaining eligible
participants of the Plan. Forfeited amounts supplement the employer
contributions and are allocated to the Plan's investment vehicles based upon
the investment elections of each eligible participant. Such reallocated
amounts were $44,685 and $103,510 during 1999 and 1998, respectively.
4
<PAGE>
The Allmerica Financial Agents' Retirement Plan
Notes to Financial Statements
NOTE 1 - Description of plan (continued)
Participant accounts
Active participants in the Plan are eligible to make 401(k) contributions
through the use of a salary reduction plan up to a maximum of $10,000 in
1999 and 1998.
As directed by participant election, all contributions may be invested in
the Fixed Fund, in the Separate Investment Accounts of the Sponsor, or in
the AFC Stock Fund, held with Allmerica Trust Company, N. A.
All investment income is reinvested in the same investment vehicle and is
credited to the respective participant account.
Participant loans
Loans made to participants are secured by the vested portion of the
participant's account up to the limit as defined in the Plan document.
Loans vary in duration, depending upon purpose, and are at an interest rate
determined by the Plan Administrator. A participant is limited to a maximum
of two loans outstanding at any one time from all plans of the Company
combined. Loan fees are no longer charged to employees as of January 1,
1999. During 1998, employees were charged a loan origination fee based on
the duration of the loan ($30 per year up to a maximum of $120) which was
paid to the Sponsor. Interest income in the Separate Investment Accounts
primarily reflects interest earned on participant loans. Included in
interest income in the Fixed Fund is interest earned on participant loans
of $8,229 and $10,586 in 1999 and 1998, respectively. Included in interest
income in the AFC Stock Fund is interest earned on participant loans of
$44,860 and $41,830 in 1999 and 1998, respectively.
Distributions and vesting provisions
Vested account balances become payable upon retirement, death, or separation
from service (including disability) as defined in the Plan document.
A participant's profit sharing account balance becomes 100% vested upon his
or her death or becoming totally and permanently disabled or upon attaining
normal retirement age (age 65). In addition, a participant's 401(k) account
balance, including the employer 401(k) contribution allocated to this
account, rollover account, after-tax voluntary contribution account and tax
deductible voluntary contribution account are 100% vested.
5
<PAGE>
The Allmerica Financial Agents' Retirement Plan
Notes to Financial Statements
NOTE 1 - Description of plan (continued)
The employer contributions other than the employer 401(k) amount shall be
100% vested after completion of 5 years of service.
The amounts vested at December 31, 1999 and 1998 were $107,579,060 and
$90,351,596, respectively.
Payments from the fund are subject to limitations and requirements specified
in the Plan document.
NOTE 2 - Significant accounting policies
Significant accounting and reporting policies followed by the Plan are
summarized as follows:
Basis of presentation
The accompanying financial statements have been presented on the accrual
basis of accounting, in accordance with generally accepted accounting
principles.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Valuation of investments
The Fixed Fund is held in the Sponsor's general account and provides for
guaranteed rates of interest reset annually. The credited interest rates
were 4.65% and 5.5% for monies invested during 1999 and 1998, respectively.
The investment contracts held by the Fixed Fund of the Plan are fully
benefit-responsive and are therefore exempt from application under the
provisions of Statement of Position 94-4 "Reporting Investment Contracts
Held by Health and Welfare Benefit Plans and Defined Contribution Plans".
As such, these investments are recorded at contract value, which
approximates fair value at December 31, 1999 and 1998.
6
<PAGE>
The Allmerica Financial Agents' Retirement Plan
Notes to Financial Statements
NOTE 2 - Significant accounting policies (continued)
The Separate Investment Accounts are pooled investment accounts established
as funding vehicles for qualified corporate retirement programs administered
by the Sponsor. Separate Investment Account funds are segregated into
accounts with specific investment objectives. Investments in Separate
Investment Accounts are stated at current value based on the market value of
the underlying securities as determined by the Sponsor, primarily through
the use of quoted prices. The investment returns of the Separate Investment
Accounts of the Sponsor were as follows:
<TABLE>
CAPTION>
Year Ended Year Ended
Separate Investment Account December 31, 1999 December 31, 1998
<S> <C> <C>
Growth Stock 29.19 % 19.49%
Diversified Bond (0.21)% 8.43%
Money Market 5.43 % 5.81%
Indexed Stock 20.91 % 29.01%
Government Securities 0.80 % 8.46%
Balanced (0.19)% 9.29%
Select Aggressive Growth 39.94 % 11.59%
Select International Equity 33.01 % 17.67%
Select Capital Appreciation 26.61 % 15.07%
Select Growth Fund 30.89 % 36.63%
</TABLE>
Due to participant-directed investment activity, actual investment returns
experienced by the Plan may differ from those of the Sponsor's Separate
Investment Accounts.
The AFC Stock Fund is a collective trust established by Allmerica Trust
Company, N.A. (a wholly-owned subsidiary of AFC). The AFC Stock Fund is
stated at fair value as determined by quoted market prices of both AFC
common stock and cash equivalents held in the Fund. The investment return
for 1999 and 1998 was (4.52)% and 17.27%, respectively.
Purchases and sales of securities are accounted for as of the trade date.
7
<PAGE>
The Allmerica Financial Agents' Retirement Plan
Notes to Financial Statements
NOTE 2 - Significant accounting policies (continued)
Other assets
Other assets represent the value of individual annuities purchased from the
Sponsor and the annual interest earned plus the cash surrender value of life
insurance contracts held within the Plan.
In addition, the Plan is a policyholder of a non-participating group annuity
contract issued by FAFLIC, formerly State Mutual Life Assurance Company of
America ("State Mutual"). As such, in 1995 the Plan received the de minimis
amount of consideration in State Mutual's demutualization in the form of
stock in AFC, the new publicly-traded holding company of FAFLIC. The
Trustee received 28 shares of AFC stock with a per share value of $21 and
a total value of $588. This award is not allocated to individual
participants of the Plan. These shares have been included in "Other Assets"
in the Statement of Net Assets Available for Benefits at December 31, 1999
and 1998.
Administrative expenses
The Sponsor paid all of the expenses incurred in the administration of the
Plan.
Federal income taxes
The Internal Revenue Service determined and informed the Sponsor by a letter
dated June 3, 1996 that the Plan is qualified and the trust established
under the Plan is tax-exempt under the appropriate sections of the Internal
Revenue Code. The Plan has been amended since receiving the determination
letter, however, the Plan Administrator believes that the Plan is designed
and is currently being operated in compliance with the applicable provisions
of the Internal Revenue Code. Therefore, no provision for income tax is
required.
NOTE 3 - Plan termination
Although the Sponsor has not expressed any intent to terminate the Plan or
discontinue contributions, it may do so at any time. Should the Plan
terminate or discontinue contributions, the Plan provides that each
participant's interest in the Plan's assets as of the termination date shall
become 100% vested and nonforfeitable and either payable to the participant
or applied to purchase a nonforfeitable retirement annuity at the
participant's option.
8
<PAGE>
The Allmerica Financial Agents' Retirement Plan
Item 10, Form 5500 - Schedule of Assets Held for Investment Purposes
Schedule H
At December 31, 1999
<TABLE>
<CAPTION>
Identity of Description of Shares or
Issue Investments Units Current Value
--------------------- -------------------------- --------- -------------
<S> <C> <C> <C>
Investments with
First Allmerica
Financial Life
Insurance Company:**
Fixed Fund Interest rates from 4.65%
to 7.70% $ 8,732,450*
Separate Investment
Accounts:
Growth Stock Fund Diversified portfolio of
common stocks 1,069,109 25,008,806*
Diversified Long term fixed income
Bond Fund securities 87,735 927,573
Money Market Fund Money market instuments
maturing in 1 year or
less 1,059,306 4,523,026
Indexed Stock Fund Common stocks which
comprise S&P 500
Composite Stock Index 2,173,304 18,776,257*
Government Debt instruments and
Securities Fund mortgage backed
securities guaranteed
by the U.S. Government
or its affiliates 16,229 278,080
Balanced Fund Diversified portfolio
balanced in traditional
stocks, bonds and cash
equivalents 195,772 4,895,066
Select Aggressive Speculative portfolio
Growth Fund of equities of small
to medium-sized emerging
growth companies 435,744 12,771,951*
Select Portfolio of equities
International of established non-
Equity Fund U.S. companies expected
to benefit from global
economic trends 406,483 9,454,865*
Select Capital Portfolio of common
Appreciation Fund stocks of industries
and companies in a
favorable competitive
environment and
regulatory climate 116,006 1,861,541
</TABLE>
9
<PAGE>
The Allmerica Financial Agents' Retirement Plan
Item 10, Form 5500 - Schedule of Assets Held for Investment Purposes
Schedule H (continued)
At December 31, 1999
<TABLE>
<CAPTION>
Identity of Description of Shares or
Issue Investments Units Current Value
--------------------- -------------------------- --------- -------------
<S> <C> <C> <C>
Investments with
First Allmerica
Financial Life
Insurance Company:**
(continued)
Select Growth Fund Diversified portfolio
comprised primarily of
common stocks 502,602 $ 9,465,860*
Participant Loans Interest rates from 7.0%
to 11.0% 3,712,241
Other Assets Individual annuities and
cash surrender values
purchased from the First
Allmerica Financial Life
Insurance Company and 28
shares of non-
participant directed AFC
common stock** 292,647
Investments with
Allmerica Trust
Company, N.A.:**
AFC Stock Fund Common stock traded on
the New York Stock
Exchange and cash
equivalents 222,825 12,439,219*
-----------
Total Investments $113,139,582
===========
</TABLE>
** Represents party-in-interest.
* Amount represents five percent or more of net assets available for
benefits.
10
<PAGE>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE ALLMERICA FINANCIAL
AGENTS' RETIREMENT PLAN
-----------------------
(Name of Plan)
/s/ Bruce C. Anderson
______________________________________________
Plan Administrator: First Allmerica Financial
Life Insurance Company by Bruce C. Anderson
Vice President
______________________________________________
June 23, 2000
<PAGE>
Exhibit Index
Exhibit 23.1 Consent of Independent Accountants
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-578) of Allmerica Financial Corporation of
our report dated June 23, 2000 relating to the financial statements of The
Allmerica Financial Agents' Retirement Plan for the year ended December 31,
1999, which appears in this Form 11-K.
/s/ PricewaterhouseCoopers LLP
______________________________
PricewaterhouseCoopers LLP
Boston, Massachusetts
June 23, 2000
<PAGE>
