-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WAzQkOqaX4HHfoGTdbvqe5uS6E1BiZo1Wp9yprFN7PWhDkQ81jlNaLbNxx5clViI AQk+pa7DloPB+sDokPEebA== 0000944695-02-000014.txt : 20020627 0000944695-02-000014.hdr.sgml : 20020627 20020627093616 ACCESSION NUMBER: 0000944695-02-000014 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020627 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLMERICA FINANCIAL CORP CENTRAL INDEX KEY: 0000944695 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 043263626 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13754 FILM NUMBER: 02688342 BUSINESS ADDRESS: STREET 1: 440 LINCOLN ST CITY: WORCESTER STATE: MA ZIP: 01653 BUSINESS PHONE: 5088551000 MAIL ADDRESS: STREET 1: 440 LINCOLN ST CITY: WORCESTER STATE: MA ZIP: 01653 11-K 1 form_11kemployee01.txt ALLMERICA FINANCIAL EMPLOYEES 401(K) PLAN 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, 2001 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 EMPLOYEES' 401(K) MATCHED SAVINGS 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 o (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) The Allmerica Financial Employees' 401(k) Matched Savings Plan Financial Statements and Additional Information December 31, 2001 and 2000 The Allmerica Financial Employees' 401(k) Matched Savings Plan - ------------------------------------------------------------------------------- December 31, 2001 and 2000 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 of Assets Held for Investment Purposes At End of Year.......... 10 * 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. Report of Independent Accountants To the Participants and Administrator of The Allmerica Financial Employees' 401(k) Matched Savings 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 Employees' 401(k) Matched Savings Plan (the "Plan") at December 31, 2001 and 2000, 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 of America. 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 of America, 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 our opinion. 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 at end of year 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. /s/PRICEWATERHOUSECOOPERS LLP June 24, 2002 The Allmerica Financial Employees' 401(k) Matched Savings Plan Statements of Net Assets Available for Benefits At December 31, - ------------------------------------------------------------------------------
2001 2000 ---------------------- ----------------------- Assets Investments, at fair value: Non-Affiliated Mutual Funds: Fidelity Advisor Income Fund $ 67,271,076 * $ - SSGA S&P 500 Index Fund 50,277,278 * - Dreyfus Premier Core Bond Fund 34,526,769 * - Putnam Vista Fund 14,733,399 - Dreyfus Cash Management Plus Fund 12,580,734 - CRM Small Cap Value Fund 11,041,801 - Alliance Premier Growth Fund 10,254,493 - Berger International Fund 9,991,660 - TCW Galileo Small Cap Fund 1,165,968 - MFS High Yield Income Fund 289,620 - Investments with First Allmerica Financial Life Insurance Company: Separate Investment Accounts: Growth Stock Fund - 84,427,505 Indexed Stock Fund - 61,161,170 Balanced Fund - 25,873,125 Select Aggressive G - 20,277,578 Select Growth Fund - 13,378,929 Select Internationaund - 12,412,865 Diversified Bond Fu - 11,505,660 Money Market Fund - 8,939,526 Select Capital Apprund - 5,695,424 Government Securities Fund - 2,984,907 ---------------------- ----------------------- 212,132,798 246,656,689 Allmerica Financial Corporation Stock Fund, at fair value 33,581,727 * 56,533,224 Investment with First Allmerica Financial Life Insurance Company, at contract value: Fixed Interest Fund 134,192,821 * 120,704,810 Participant loans 9,406,238 10,456,611 Other assets 252,697 454,559 ---------------------- ----------------------- Net assets available for $ 389,566,281 $ 434,805,893 ====================== ======================= *Amount represents five percent or more of net assets avaiable for benefits at December 31, 2001.
The accompanying notes are an integral part of these financial statements. 2 The Allmerica Financial Employees' 401(k) Matched Savings Plan Statements of Changes in Net Assets Available for Benefits For the years ended December 31, - -------------------------------------------------------------------------------
2001 2000 ------------------- ------------------ Investment income: Net (depreciation) appreciation of: Non-Affiliated Mutual Funds $ (16,909,736) $ - Separate Investment Accounts (10,280,626) (20,200,328) Allmerica Financial Corporation Stock Fund (20,795,007) 14,912,315 Interest and dividend income 10,801,931 8,012,551 ------------------- ------------------ (37,183,438) 2,724,538 ------------------- ------------------ Contributions: Employer contributions 5,381,833 6,425,551 Employee contributions 19,741,144 19,777,780 ------------------- ------------------ 25,122,977 26,203,331 ------------------- ------------------ Total (deductions) additions (12,060,461) 28,927,869 ------------------- ------------------ Benefit payments (33,190,631) (51,308,801) Purchase of life insurance and annuity contracts 11,480 13,428 ------------------- ------------------ Total deductions (33,179,151) (51,295,373) ------------------- ------------------ Net decrease during year (45,239,612) (22,367,504) Transfers out of Plan - (4,167,536) Net assets available for benefits, beginning of year 434,805,893 461,340,933 ------------------- ------------------ Net assets available for benefits, end of year $ 389,566,281 $ 434,805,893 =================== ==================
The accompanying notes are an integral part of these financial statements. 3 The Allmerica Financial Employees' 401(k) Matched Savings Plan Notes to Financial Statements - ------------------------------------------------------------------------------- NOTE 1 - Description of plan The following description of The Allmerica Financial Employees' 401(k) Matched Savings 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 eligible employees of First Allmerica Financial Life Insurance Company ("FAFLIC," "the Sponsor," or "Company"), a wholly-owned subsidiary 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"). In June 2001, the Board of Directors of the Company appointed State Street Bank and Trust Company the Trustee of the Plan and of the AFC Stock Fund. The Sponsor continues to hold those assets invested in its Fixed Interest Fund. The Plan's recordkeeper is Hewitt Associates LLC. Eligibility Active 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 The Plan has a 401(k) match provision. Employees are eligible to receive matching contributions in the Plan on the first day of the calendar month following completion of one year of service, as defined by the Plan document. Under this provision, the amount of the match is determined by Company performance at the discretion of the Sponsor's Board of Directors and is announced at the beginning of each year. Employer contributions are 100% vested to the participant immediately upon receipt. In addition, the Board of Directors may require that all matching contributions be made to the AFC Stock Fund. However, this restriction was not imposed during the 2001 or 2000 plan year. In 2001 and 2000, the matching contribution rate was 50 cents on every dollar up to the first 6% of compensation contributed to the Plan by a participant. These contributions were allocated to the same investment vehicles as the employee contributions. 4 NOTE 1 - Description of plan (continued) Forfeitures Forfeitures of employer contributions related to nonvested terminated participants have been transferred to the Dreyfus Cash Management Plus Fund in 2001, and to either the Money Market Fund or the Fixed Interest Fund in 2000. Forfeited amounts are used to offset the employer contributions and are allocated to the Plan's investment vehicles based upon the investment elections of each eligible participant. Forfeitures in the amount of $375,303 during 2000 and 2001 were used to reduce employer contributions in 2001. 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 $10,500 for 2001 and 2000. Beginning June 12, 2001, participants were no longer able to direct their contributions to or maintain balances in the Separate Investment Accounts of the Sponsor. These investment options have been replaced with non-affiliated mutual funds. As directed by participant election, contributions after June 12, 2001 may be invested in the Fixed Interest Fund, the non-affiliated mutual funds, or the Allmerica Financial Corporation Stock Fund. All investment income is reinvested in the same investment vehicle and is credited to the respective participant account. Participant loans Loans made to active 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 not charged to employees. Interest income on participant loans totaled $842,106 and $903,444 in 2001 and 2000, 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 account balance is immediately vested and includes the employer matching contribution, the employer profit sharing contribution equal to 2% of participant earnings(contributed for plan years 1994 and prior), the rollover account, the after-tax voluntary contribution account and the tax deductible voluntary contribution account. 5 NOTE 1 - Description of plan (continued) The employer profit sharing contributions (contributed for the plan years 1994 and prior), other than the 2% allocated to the 401(k) account become vested as follows: Vested Percentage of Completed Years of Service Regular Account Balance -------------------------- ----------------------- 1 0% 2 25% 3 50% 4 75% 5 100% The amounts vested at December 31, 2001 and 2000 were $378,763,927 and $433,381,063, 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 prepared 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 disclosures 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 Interest Fund is held in the Sponsor's general account and provides for guaranteed rates of interest reset annually. The credited interest rate was 6.00% for monies invested in 2001 and 2000. 6 NOTE 2 - Significant accounting policies (continued) The investment contracts held by the Fixed Interest Fund of the Plan are fully benefit-responsive and are therefore exempt from fair value accounting for certain contracts under the provisions of Statement of Position 94-4, "Reporting Investment Contracts Held by Health and Welfare Benefit Plans and Defined Contribution Plans". Assuch, these investments are recorded at contract value, which approximates fair value at December 31, 2001 and 2000. Investments in Non-Affiliated Mutual Funds are priced using the end of day fair market value of the underlying funds as recorded by State Street Bank and Trust Company. 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 non-affiliated mutual funds and the Separate Investment Accounts of the Sponsor were as follows: Period from July 1, 2001 to Year Ended Non-Affiliated Mutual Funds December 31, 2001 December 31, 2000 - --------------------------- ----------------- ----------------- Fidelity Advisor Income Fund (3.45)% n/a SSGA S&P 500 Index Fund (6.60)% n/a Putnam Vista Fund (13.86)% n/a Berger International Fund (9.31)% n/a Alliance Premier Growth Fund (10.94)% n/a Dreyfus Premier Core Bond Fund 0.52 % n/a CRM Small Cap Value Fund 3.44 % n/a Dreyfus Cash Management Plus Fund 1.44 % n/a TCW Galileo Small Cap Fund (21.32)% n/a MFS High Yield Income Fund 0.31 % n/a Period from January 1, 2001 Year Ended Separate Investment Accounts to June 30, 2001 December 31, 2000 - ---------------------------- ----------------- ----------------- Growth Stock Fund (8.97)% (9.46)% Indexed Stock Fund (7.21)% (8.75)% Select Aggressive Growth Fund (12.36)% (23.89)% Select International Equity Fund (14.23)% (8.08)% Select Growth Fund (14.84)% (17.14)% Balanced Fund (0.88)% 12.53 % Select Capital Appreciation Fund (0.35)% 7.85 % Money Market Fund 3.29 % 6.70 % Diversified Bond Fund 3.41 % 11.11 % Government Securities Fund 3.32 % 10.87 % 7 NOTE 2 - Significant accounting policies (continued) Due to participant-directed investment activity, actual investment returns experienced by the participants in the Plan may differ from those displayed in the above Fund returns. 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. Beginning June 12, 2001, State Street Bank and Trust Company became the Trustee of the Fund. The investment return for 2001 and 2000 was (37.46)% and 30.47%, respectively. Purchases and sales of securities are accounted for as of the trade date. 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. Administrative expenses Hewitt Associates LLC maintains agreements with certain of the non-affiliated mutual fund options and for such agreements receives a portion of 12b-1 fees. The reimbursement is calculated based on the value of each respective options' average daily net assets. These reimbursements are used to reduce fees charged by Hewitt Associates LLC to the Sponsor for certain administrative and professional services. Beginning June 12, 2001, State Street Bank and Trust Company began providing certain trustee services for the plan. These fees are voluntarily assumed and paid directly by the Sponsor. The Sponsor pays all other expenses incurred in the administration of the Plan. NOTE 3 - Federal income taxes The Internal Revenue Service has determined and informed the Sponsor by a letter dated February 21, 2002, that the Plan is qualified and the trust established under the Plan is tax exempt under the appropriate sections of the Internal Revenue Code. Therefore, no provision for income tax is required. NOTE 4 - 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 non-forfeitable and be either payable to the participant or applied to purchase a non-forfeitable retirement annuity at the participant's option. 8 NOTE 5 - Significant transactions and other matters During the second quarter of 2000, the Sponsor adopted a formal company-wide restructuring plan. This plan consisted of various initiatives resulting in the elimination of approximately 360 positions, of which 240 employees were terminated as of December 31, 2001 and 120 vacant positions have been eliminated. Plan assets declined during 2001 and 2000 as a result of increased withdrawals related to these terminated employees. On October 6, 1999, Allmerica Financial Corporation entered into an agreement with Great-West Life and Annuity Insurance Company of Denver (Great-West), which provided for the sale of the Company's group life and health business effective March 1, 2000. As a result of this sale, a certain number of Plan participants became employees of Great-West. The Plan assets of the affected participants totaled $4,167,536 and were transferred to a Great-West 401(k) plan during 2000. 9 The Allmerica Financial Employees' 401(k) Matched Savings Plan Schedule of Assets Held for Investment Purposes At End of Year Form 5500, Schedule H, Part IV, Line 4i At December 31, 2001 - -------------------------------------------------------------------------------
Identity of Description Shares or Contract or Issue of Investments Units Current Value Investment with First Allmerica Financial Life Insurance Company:** Fixed Interest Fund Interest rates at 6.00% 134,192,821 * Investments with Non-Affiliated Mutual Funds: Fidelity Advisor Income Diversified portfolio of mid- to 2,743,519 67,271,076 * Fund large-cap value companies SSGA S&P 500 Index Fund Common stocks which comprise S&P 500 2,657,361 50,277,278 * Composite Stock Index Dreyfus Premier Core Bond Broad-based, intermediate-term bond 3,455,786 34,526,769 * Fund fund designed to offer diversified exposure to the domestic fixed-income market Putnam Vista Fund Growth oriented, mid-cap fund with 1,705,255 14,733,399 domestic focus Alliance Premier Growth Large-cap growth fund investing in 969,234 10,254,493 Fund companies with above average earnings growth Berger International Portfolio of value oriented, foreign 955,226 9,991,660 Fund mid- and large-cap multinational companies (sub-advised by Bank of Ireland Asset Management) TCW Galileo Small Small- to mid-cap aggressive growth 62,086 1,165,968 Cap Fund fund
10 The Allmerica Financial Employees' 401(k) Matched Savings Plan Schedule of Assets Held for Investment Purposes At End of Year (continued) Form 5500, Schedule H, Part IV, Line 4i At December 31, 2001 - -------------------------------------------------------------------------------
Identity of Description Shares or Contract or Issue of Investments Units Current Value Investments with Non-Affiliated Mutual Funds (continued): Dreyfus Cash Management Short-term money market fund that 1,236,177 12,580,734 Plus Fund invests primarily in high-quality domestic and foreign U.S. Dollar denominated money market instruments CRM Small Cap Small-cap fund focused on long-term 531,879 11,041,801 Value Fund capital appreciation by investing in value-oriented securities MFS High Yield Income Fund Portfolio that seeks high current 29,738 289,620 income by investing in higher yielding, lower rated debt of financially weaker companies Allmerica Financial Common stock traded on the New York 737,236 33,581,727 * Corporation Stock Fund Stock Exchange and cash equivalents Participant loans Interest rates from 6.0% to 10.5% 9,406,238 Other assets Individual annuities and life 252,697 insurance contracts purchased from First Allmerica Financial Life Insurance Company ** Total Investments $389,566,281 ================ * Amount represents five percent or more of net assets available for benefits. ** Represents party-in-interest.
11 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 EMPLOYEES' 401(K) MATCHED SAVINGS PLAN (Name of Plan) /s/ Barbara Z. Rieck Plan Administrator: First Allmerica Financial Life Insurance Company by Barbara Z. Rieck Manager of Retirement Services June 25, 2002 12 Exhibit Index Exhibit 23.1 Consent of Independent Accountants 13 Exhibit 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-576) of Allmerica Financial Corporation of our report dated June 24, 2002 relating to the financial statements of The Allmerica Financial Employees' 401(k) Matched Savings Plan, which appears in this Form 11-K. /s/ PRICEWATERHOUSECOOPERS LLP PricewaterhouseCoopers LLP Boston, Massachusetts June 24, 2002 14 -----END PRIVACY-ENHANCED MESSAGE-----