Document:

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                                                                  EXHIBIT 10.20

                       THE ALLMERICA FINANCIAL CORPORATION

                           EMPLOYMENT CONTINUITY PLAN

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                       THE ALLMERICA FINANCIAL CORPORATION

                           EMPLOYMENT CONTINUITY PLAN

ARTICLE 1

Purpose

1.1   The purpose of the Plan is

      (a)   to keep top management employees focused on the interests of the
            Company's shareholders and to secure their continued services in
            addition to their undivided dedication and objectivity in the event
            of any threat or occurrence of, or negotiation or other action that
            could lead to the possibility of, a Change in Control; and

      (b)   to ensure that Participants do not (i) solicit or assist in the
            solicitation of employees of the Company or any affiliate for a
            specified period, or (ii) disclose any confidential or proprietary
            information of the Company or any affiliate prior to or after a
            Change in Control.

ARTICLE 2

Definitions

The following capitalized terms used in the Plan have the respective meanings
set forth in this Article:

2.1   Actuarial Equivalent: The actuarial equivalent determined in accordance
      with the methodology specified in the Retirement Plan(s).

2.2   Anticipatory Change in Control: (i) Any "person" including a "group" (as
      such terms are used in Sections 13(d) and 14(d)(2) of the 1934 Act, but
      excluding the Company, its affiliates, any employee benefit plan of the
      Company or any affiliate, and an underwriter temporarily holding
      securities pursuant to an offering of such securities) commences a tender
      offer for securities, which if consummated, would result in such person
      owning 20% or more of the combined voting power of the Company's then
      outstanding securities, (ii) the Company enters into an agreement the
      consummation of which would constitute a Change in Control, (iii) proxies
      for the election of directors of the Company are solicited by anyone other
      than the Company, (iv) any "person" including a "group" (as such terms are
      used in Sections 13(d) and 14(d)(2) of the 1934 Act, but excluding the
      Company, its affiliates, any employee benefit plan of the Company or any
      affiliate, and an underwriter temporarily holding securities pursuant to
      an offering of such securities) is required to file a statement under Rule
      13d-1(b)(2) of the 1934 Act, or (v)

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      any other event occurs which is deemed to be an Anticipatory Change in
      Control by the Board or the Committee.

2.3   Board: The Board of Directors of Allmerica Financial Corporation or any
      successor entity thereto.

2.4   Cause: (i) The continued willful failure of a Participant to perform
      substantially his or her duties with the Company or any affiliate (other
      than any such failure resulting from the Participant's incapacity due to
      disability within the meaning of the Company's short term disability plan
      as in effect at the time such determination is made) after ten (10) days
      prior written notice from the Board; (ii) the Participant's conviction of,
      or plea of guilty or nolo contendere to, a felony; (iii) the willful
      engaging by the Participant in illegal conduct or gross misconduct which
      is demonstrably and materially injurious to the Company or any affiliate;
      or (iv) the breach by the Participant of any nondisclosure or
      nonsolicitation agreement with the Company or any affiliate, including but
      not limited to the agreements provided under sections 5.2 and 6.5 hereof.

2.5   Cash Balance Plan: The Allmerica Financial Corporation Cash Balance
      Retirement Plan, as from time to time amended.

2.6   Change in Control: (i) The members of the Board at the beginning of any
      consecutive twenty-four (24) calendar month period (the "Incumbent
      Directors") cease at any time during such period for any reason other than
      due to death, Disability or Retirement (in the event of a member's death,
      Disability or Retirement, such member shall be deemed to continue as an
      Incumbent Director until such member's seat on the Board is filled) to
      constitute at least a majority of the members of the Board, provided that
      any director whose election or nomination for election by the Company's
      stockholders was approved by a vote of at least a majority of such
      Incumbent Directors shall be treated as an Incumbent Director; (ii) any
      "person" including a "group" (as such terms are used in Sections 13(d) and
      14(d)(2) of the 1934 Act, but excluding the Company, its affiliates, any
      employee benefit plan of the Company or any affiliate, and an underwriter
      temporarily holding securities pursuant to an offering of such securities)
      is or becomes the "beneficial owner" (as defined in Rule 13(d)(3) under
      the 1934 Act), directly or indirectly, of securities of the Company
      representing 35% or more of the combined voting power of the Company's
      then outstanding securities; (iii) the consummation of a merger,
      consolidation, share exchange or similar form of corporate transaction
      involving the Company or any affiliate that requires the approval of the
      Company's stockholders (excluding a corporate transaction involving solely
      the Company and its affiliates) (a "Business Combination"), unless the
      stockholders immediately prior to such Business Combination own more than
      50% of the total voting power of the successor corporation resulting from
      such Business Combination or a majority of the board of directors of the
      successor corporation were Incumbent Directors immediately prior to such
      Business Combination; (iv) the stockholders of the Company approve a sale
      of all or substantially all of the Company's assets and such sale is
      consummated; or (v) the stockholders of the Company approve a plan of
      complete liquidation or dissolution of the Company.

2.7   Code: The Internal Revenue Code of 1986, as amended from time to time.

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2.8   Committee: The Compensation Committee of the Board or such other committee
      or persons designated by the Board.

2.9   Company: Allmerica Financial Corporation or any successor entity thereto,
      including without limitation, the transferee of all or substantially all
      of the stock or assets of the Company.

2.10  Coverage Period: The three-year period commencing on the date of
      termination of employment with the Company and its affiliates for Category
      1 Participants; the two-year period commencing on the date of termination
      of employment with the Company and its affiliates for Category 2
      Participants; and the one-year period commencing on the date of
      termination of employment with the Company and its affiliates for Category
      3 Participants.

2.11  Disability: With respect to members of the Board, the inability to engage
      in any substantial gainful activity by reason of a medically determinable
      physical or mental impairment which can be expected to result in death or
      which can be expected to last for a continuous period of not less than
      twelve (12) months.

2.12  Early Retirement Age: Early retirement age as defined in the Retirement
      Plan(s).

2.13  Effective Date: The date on which the Plan becomes effective as set forth
      in section 3.1 hereof.

2.14  Excess Plan: Any nonqualified plan which provides supplementary retirement
      benefits for participants in the Cash Balance Plan with compensation in
      excess of the section 401(a)(17) and section 415 limits of the Code, as
      from time to time amended.

2.15  [Reserved.]

2.16  Good Reason: Upon or subsequent to a Change in Control, without the
      Participant's express written consent, (i) any change in the duties or
      responsibilities of the Participant that are inconsistent in any material
      and adverse respect with the Participant's duties or responsibilities
      immediately prior to the Change in Control; provided, that no change in
      the Participant's responsibilities that occurs as a result of the Company
      no longer being a public company or becoming a subsidiary after the Change
      in Control shall constitute Good Reason hereunder, (ii) a reduction in the
      Participant's rate of annual base salary as in effect immediately prior to
      such Change in Control, or a failure to provide an annual target bonus
      opportunity (including any adverse change in the formula for such annual
      bonus target but excluding the conversion of any cash bonus arrangement
      into an equity incentive arrangement of commensurate value) substantially
      similar to that which was in effect immediately prior to such Change in
      Control; (iii) a failure to provide benefits which are substantially
      similar in the aggregate to the benefits under any employee benefit plan,
      compensation plan, welfare benefit plan or material fringe benefit plan in
      which the Participant is participating immediately prior to the Change in
      Control (excluding any across-the-board reduction in benefits effected
      with respect to all executive employees of

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      the Company after the Change in Control); (iv) any requirement that the
      Participant relocate to an office more than 35 miles from the facility
      where the Participant is located immediately prior to the Change in
      Control; or (v) the failure of the Company to cause any successor entity
      to the Company to assume all obligations under the Plan as set forth in
      section 8.3 hereof.

2.17  Multiplier: Three (3) for Category 1 Participants; two (2) for Category 2
      Participants; and one (1) for Category 3 Participants.

2.18  [Reserved]

2.19  1934 Act: The Securities Exchange Act of 1934, as amended from time to
      time.

2.20  Normal Retirement Age: Normal retirement age as defined in the Retirement
      Plan(s).

2.21  Participant: Any individual specified on Appendix A attached hereto in
      accordance with Article 4 hereof, and who has entered into a
      non-solicitation agreement in form and substance satisfactory to the
      Company.

2.22  Plan: The Allmerica Financial Corporation Employment Continuity Plan, as
      from time to time amended.

2.23  Protection Period: The period beginning with a Change in Control and
      ending on the second anniversary thereof.

2.24  Retirement: With respect to employees, separation from service with the
      Company and its affiliates in accordance with a retirement plan maintained
      by the Company (as in existence immediately prior to the Change in
      Control) or in accordance with any retirement arrangement established with
      respect to the Participant with the Participant's consent; with respect to
      members of the Board, retirement pursuant to a retirement policy then in
      effect for members of the Board.

2.25  Retirement Plan(s): To the extent a Participant is eligible for retirement
      benefits thereunder, the Cash Balance Plan and the Excess Plan as
      applicable.

2.26  Stock Incentive Plans: Allmerica Financial Corporation Long-Term Stock
      Incentive Plan and any successor(s) to such plans or other stock option or
      stock incentive plans approved by the Board.

2.27  Transition Group: Participants who have attained an age as of December 31,
      1994, which when added with two (2) times their credited service as of
      December 31, 1994 under the Cash Balance Plan, equals or exceeds
      eighty-five (85).

ARTICLE 3

Plan Term

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3.1   Effective Date: The Plan shall be effective as of December 17, 1996.

3.2   Expiration: Except as provided in sections 3.3, 3.4 and 3.5 hereof, the
      Plan shall terminate on the December 31st of the calendar year in which
      the notice requirement of section 3.6 hereof has been satisfied.

3.3   Initial Term: In no event shall the Plan terminate prior to December 31,
      1998.

3.4   Anticipatory Change in Control: In the event the Plan would otherwise
      terminate pursuant to section 3.2 hereof during any one-year period
      commencing upon an Anticipatory Change in Control, the Plan shall
      terminate on the first anniversary of such Anticipatory Change in Control;
      provided, however, in the event of a Change in Control during the one-year
      period commencing upon such Anticipatory Change in Control, the Plan shall
      terminate on the last day of the Protection Period.

3.5   Change in Control: In the event the Plan would otherwise terminate
      pursuant to section 3.2 hereof during the Protection Period commencing
      upon a Change in Control, the Plan shall terminate on the last day of the
      Protection Period.

3.6   Notice: The notice requirement of this section shall be satisfied on the
      September 30th coincident with or next following the date on which all
      Participants have received written notice from the Committee of its desire
      to terminate the Plan.

ARTICLE 4

Eligibility

4.1   General: Any individual specified on Appendix A attached hereto shall be a
      Participant eligible to receive benefits and payments hereunder.
      Participants shall be designated as "Category 1" or "Category 2" or
      "Category 3" on Appendix A and shall receive benefits and payments
      hereunder in accordance with such designation.

4.2   Addition or Move: The Committee in its sole discretion may add the names
      of additional employees of the Company or any affiliate to Appendix A or
      move the name of a Participant from Category 3 or Category 2 to Category 1
      or from Category 3 to Category 2 (any such move is referred to herein as
      an "Upward Redesignation") at any time, or subject to the provisions of
      section 4.3 hereof, move the name of a Participant from Category 1 to
      Category 2 or Category 3 or from Category 2 to Category 3 (a "Downward
      Redesignation"). Each such employee shall be eligible to receive benefits
      and payments hereunder in accordance with the employee's designation on
      Appendix A.

4.3   Removal or Downward Redesignation: Except as provided in sections 4.4, 4.5
      and 4.6 hereof, the Committee in its sole discretion may remove the name
      of any individual specified on Appendix A or cause a Downward
      Redesignation effective on the December 31st of the calendar in which the
      notice requirement of section 4.7 hereof has been satisfied. However, a
      Participant who voluntarily terminates his/her employment with the Company
      and/or one of its affiliates shall be removed from Appendix A as of the
      date

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      that his/her employment is terminated and in the case of a Participant
      involuntarily terminated by the Company and/or its affiliates prior to the
      occurrence of an Anticipatory Change of Control, removal of such
      Participant's name from Appendix A shall occur upon the expiration of
      thirty (30) days after notice has been received by the Participant's from
      the Committee. An individual removed from Appendix A shall cease to be
      eligible to receive benefits and payments hereunder and all rights thereto
      shall be without further force or effect upon removal from Appendix A. An
      individual whose Downward Redesignation is effective shall be eligible to
      receive benefits and payments hereunder in accordance with such
      individual's revised designation on Appendix A. Notwithstanding any
      provision in the Plan to the contrary, the Committee may remove the name
      of any individual specified on Appendix A or cause a Downward
      Redesignation at any time with such individual's written consent.

4.4   Initial Term: In no event shall the name of any Participant be removed
      from Appendix A prior to December 31, 1998.

4.5   Anticipatory Change in Control: In the event of an Anticipatory Change in
      Control, any name which would otherwise be removed from Appendix A or the
      subject of a Downward Redesignation pursuant to section 4.3 hereof during
      the one-year period commencing upon such Anticipatory Change in Control
      shall be removed or redesignated on the first anniversary of such
      Anticipatory Change in Control; provided, however, in the event of a
      Change in Control during the one-year period commencing upon such
      Anticipatory Change in Control, such name shall be removed from Appendix A
      or such redesignation shall be effective on the first day following the
      end of the Protection Period. Notwithstanding the foregoing, a Participant
      may be removed from Appendix A after an Anticipatory Change in Control if
      such removal is due to a termination for Cause or the Participant
      voluntarily terminates his employment.

4.6   Change in Control: In the event of a Change in Control, any name which
      would otherwise be removed from Appendix A or be the subject of a Downward
      Redesignation shall be so removed or redesignated, as the case may be, on
      the first day following the end of the Protection Period.

4.7   Notice: The notice requirement of this section shall be satisfied on the
      September 30th coincident with or next following the date on which the
      Participant has received written notice from the Committee of its desire
      to remove such individual's name from the list of Participants on Appendix
      A or to cause a Downward Redesignation as the case may be. Notwithstanding
      the foregoing, in the event a Participant is involuntarily terminated by
      the Company and/or one of its affiliates prior to the occurrence of an
      Anticipated Change of Control, the notice requirement of this section
      shall be satisfied upon the expiration of thirty (30) days after the
      Participant has received written notice from the Committee of its desire
      to remove such individual's name from the list of Participants on Appendix
      A, and no notice is required if a Participant voluntarily terminates his
      employment with the Company and/or one of its affiliates.

ARTICLE 5

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Change in Control Payments

5.1   General: In the event of a Change in Control, the Company shall pay to
      each Participant within ten (10) days following such Change in Control, a
      lump-sum cash amount equal to the sum of

      (a)   the fair market value (determined in accordance with the applicable
            Stock Incentive Plans as of the date of the Change in Control) of
            shares of common stock awarded to the Participant under the Stock
            Incentive Plans which are not vested immediately after the Change in
            Control; and

      (b)   the excess of

            (i)   the fair market value (determined in accordance with the
                  applicable Stock Incentive Plans as of the date of the Change
                  in Control) of the shares of common stock designated to a
                  stock option (or stock appreciation right) granted to the
                  Participant under the Stock Incentive Plans and with respect
                  to which, such stock option (or stock appreciation right) is
                  not exercisable immediately after the Change in Control, over
            (ii)  the exercise price (or base price) for such shares.

5.2   Release: Notwithstanding the foregoing, no amount shall be payable under
      section 5.1 hereof unless the Participant executes a Waiver and Release in
      form and substance approved by the Company, which shall be substantially
      in the form provided in Appendix B attached hereto or as otherwise amended
      by the Company in accordance with section 8.5 hereof, and such agreement
      becomes effective waiving and extinguishing any further rights or benefits
      under the Stock Incentive Plans with respect to shares of common stock,
      stock options or stock appreciation rights "cashed out" pursuant to
      Section 5.1 above.

ARTICLE 6

Protected Termination Benefits and Payments

6.1   General: Except as provided in section 6.2(b) hereof, in the event of a
      Change in Control, the Company shall pay the benefits and payments
      specified in sections 6.3 and 6.4 hereof if,

      (a)   the Company or any affiliate terminates a Participant's employment
            with the Company and its affiliates without Cause during the
            Protection Period,

      (b)   the Participant terminates employment with the Company and its
            affiliates with Good Reason during the Protection Period, or

      (c)   the Participant terminates employment with the Company and its
            affiliates for any reason at any time during the thirteenth calendar
            month commencing after the Change in Control.

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6.2   Retirement, Death or Disability:

      (a)   For purposes of section 6.1(b) hereof, any termination of employment
            by reason of Retirement without Good Reason shall be deemed to be a
            termination of employment by the Participant without Good Reason.

      (b)   Notwithstanding the foregoing, no benefits or payments shall be
            payable to a Participant under this Article in the event the
            Participant's employment is terminated by reason of death or such
            Participant becomes eligible for disability benefits under the
            Company's long-term disability plan.

6.3   Lump-Sum Benefits: In the event of a termination of employment specified
      in section 6.1 hereof, the Company shall pay to each Participant within
      thirty (30) days following such termination, a lump-sum cash amount equal
      to the sum of

      (a)   the Multiplier times the sum of

            (i)   the greater of (A) the Participant's annual base salary in
                  effect on the date of termination of employment or (B) the
                  Participant's annual base salary in effect immediately prior
                  to the date of the Change in Control; and

            (ii)  the target bonus for the Participant under the Short Term
                  Incentive Plan as in effect immediately prior to the Change in
                  Control (if the Short Term Incentive Plan does not have a
                  target bonus for the year in which the Change of Control
                  occurred, the most recent target bonus shall be used);

      (b)   an amount equal to the target bonus potential under the Short Term
            Incentive Plan for the plan year in which the Participant's
            employment is terminated, times a fraction (not more than one (1),
            the numerator of which shall be the number of days the Participant
            is employed by the Company or any affiliate during the plan year in
            which the Participant's employment is terminated and the denominator
            of which shall be 365;

      (c)   if not paid prior to the termination of employment, the
            Participant's Short Term Incentive Award for the year prior to the
            year in which the Participant's employment is terminated; and

      (d)   the Multiplier times the amount which would be credited to the
            Participant's account balance(s) under the Retirement Plan(s) in the
            plan year in which the Participant's employment is terminated,
            assuming the Participant's account balance(s) is credited in such
            year with seven (7) percent of compensation as defined in the
            Retirement Plan(s) at the greater of (A) the annualized rate of
            compensation in effect on the date of termination of employment or
            (B) the compensation for the plan year immediately preceding the
            year in which the Change in Control occurred; and

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      (e)   with respect to any member of the Transition Group, the excess of

            (i)   the Actuarial Equivalent of the final average pay benefit
                  under the Retirement Plan(s) at Normal Retirement Age assuming
                  such member were credited with a number of additional years of
                  service equal to the Multiplier applicable to such Participant
                  over

            (ii)  the Actuarial Equivalent of the actual final average pay
                  benefit under the Retirement Plan(s) at Normal Retirement Age.

6.4   Other Benefits: In the event of a termination of employment specified in
      section 6.1 hereof, the Company shall

      (a)   continue for the Coverage Period to cover the Participant under
            those employee benefit plans (including but not limited to life and
            disability insurance coverage but excluding health plan coverage
            which is otherwise provided for in sections 6.4(d) and 6.4(e)
            hereof) which were applicable to the Participant immediately prior
            to the Change in Control at the same benefit levels then in effect
            (or shall provide their equivalent);

      (b)   provide outplacement services to the Participant at a cost of no
            more than 17% of the greater of the Participant's annual base salary
            in effect on the date of termination of employment or the
            Participant's annual base salary in effect immediately prior to the
            date of the Change in Control, or at the Participant's election, in
            lieu of such outplacement services, pay to the Participant within
            thirty (30) days following such termination, a lump-sum cash amount
            equal to $20,000;

      (c)   with respect to any member of the Transition Group who does not
            satisfy the age and service requirements for early retirement
            benefits without actuarial reduction under the Retirement Plan(s)
            upon termination of employment but would satisfy such requirements
            if such member were, on the date of such termination, as many years
            older as the number equal to the Multiplier applicable to such
            Participant and such member were credited with the same number of
            years of service, provide supplemental payments hereunder at the
            same time and in the same manner as the payments payable under the
            Retirement Plan(s) to the Participant so that the Participant
            receives in the aggregate the benefit (calculated using the
            Participant's actual age and years of service) that would be payable
            if the Participant were entitled to an early retirement benefit
            without actuarial reduction under such Retirement Plan(s);

      (d)   with respect to any Participant who is entitled to post-retirement
            medical benefits under the post-retirement medical plan or
            arrangement in effect immediately prior to the Change in Control or
            who would be entitled to such benefits if such Participant were
            older or had more years of service than such Participant actually

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            has on the date of the Participant's termination of employment by a
            number of years equal to the Multiplier and such Participant were
            credited with a number of additional years of service and age, in
            each case equal to the Multiplier,

            (i)   during the Coverage Period, provide coverage for the
                  Participant and the applicable dependents under the group
                  health plan maintained by the Company or any affiliate at
                  substantially the same level of coverage in effect immediately
                  prior to the Change in Control or coverage in effect at the
                  date of termination provided such coverage provides a
                  substantially equivalent level of coverage as the coverage in
                  effect immediately prior to the Change in Control, and

            (ii)  upon expiration of such Coverage Period, provide the
                  Participant and applicable dependents with coverage under the
                  post-retirement medical plan or arrangement at a level
                  substantially similar to the level in effect immediately prior
                  to termination of employment, subject to retiree contributions
                  at a rate no greater than that in effect immediately prior to
                  termination of employment or (as the same may be adjusted from
                  time to time) for all similarly situated retirees with
                  comparable age, health background and coverage (or shall
                  provide their equivalent);

      (e)   with respect to any Participant who is not eligible for the benefits
            specified in section 6.4(d) hereof during the Coverage Period,
            provide coverage for the Participant and the applicable dependents
            under the group health plan maintained by the Company or any
            affiliate at substantially the same level of coverage in effect
            immediately prior to the Change in Control or coverage in effect at
            the date of termination provided such coverage provides a
            substantially equivalent level of coverage as the coverage in effect
            immediately prior to the Change in Control, except that, for
            Participants in Category 3 as of February 10, 2002, the coverage
            provided by this subsection shall be for a period of eighteen months
            instead of the one year Coverage Period;

      (f)   discontinue one or more of the benefits provided under Sections
            6.4(a) and 6.4(e) if a Participant obtains employment with another
            company pursuant to which substantially equivalent benefits are
            available, and

      (g)   upon expiration of the group dental or health coverage set forth in
            Sections 6.4(a) and 6.4(e), if a Participant is not eligible for
            substantially equivalent coverage as a Participant or dependent
            under a plan maintained by another employer, then the Participant
            shall be entitled to receive COBRA Continuation Coverage at their
            own expense.

6.5   Release: Notwithstanding the foregoing, no amounts shall be payable under
      sections 6.3 and 6.4 hereof unless the Participant executes a Waiver and
      General Release, in form and substance approved by the Company, which
      shall be substantially in the form provided in Appendix C attached hereto
      or as otherwise amended by the Company in

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      accordance with section 8.5 hereof, and such agreement becomes effective.

6.6   Interim Period:

      (a)   In the event the Company or any affiliate terminates a Participant's
            employment with the Company and its affiliates without Cause during
            the period between the commencement of an Anticipatory Change in
            Control and a Change in Control (the "Interim Period"), and a Change
            of Control occurs within the one-year period after the date of the
            Anticipatory Change of Control, such Participant shall become
            entitled to the benefits he or she otherwise would have received if
            such termination had occurred on the date of the Change in Control
            and he or she was terminated on such date without Cause; provided
            however,

            (i)   any benefits payable shall be reduced by any severance or
                  similar payments or benefits otherwise paid or payable by the
                  Company or its affiliates in connection with such termination;

            (ii)  such Participant shall be subject to the same obligations and
                  responsibilities as any other Participant receiving similar
                  benefits hereunder (including, without limitation, the
                  requirement to provide waivers and releases under Sections 5.2
                  and 6.5); and

            (iii) no benefits shall be payable as a result of the application of
                  this Section 6.6 if the removal of such Participant's name
                  from Appendix A has become effective, if a Change in Control
                  does not occur or if the Participant agrees in writing to
                  waive the right to such payments or benefits.

      (b)   If during the Interim Period,

            (i)   any change is made to a Participant's duties or
                  responsibilities, or any reduction is made to the
                  Participant's salary or annual target opportunity, or any
                  reduction is made with respect to other benefit, compensation,
                  welfare benefit or other material fringe benefit plan
                  (excluding with respect to any such plan any across-the-board
                  reductions in benefits effected with respect to all executive
                  employees of the Company), or

            (ii)  the Participant is required to relocate to an office more than
                  35 miles from the facility where the Participant is located
                  immediately prior thereto,

      then for purposes of determining whether Good Reason exists, or
      determining benefits payable pursuant to this Plan, such Participant's
      duties and responsibilities, salary and annual target opportunity, or
      other benefit compensation, welfare benefit or other material fringe
      benefit plan, or location, as applicable, shall be applied as of the date
      of the Anticipatory Change in Control.

ARTICLE 7

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Taxation of Benefits and Payments

7.1   Withholding Taxes: The Company may withhold from the Participant's
      benefits and payments payable hereunder the amount which it determines is
      necessary to satisfy its obligation to withhold federal, state and local
      income taxes or other taxes or amounts required to be withheld.

7.2   Gross-Up Payment: In the event it shall be determined that any benefit or
      payment payable hereunder to a Participant would be subject to the excise
      tax imposed by section 4999 of the Code, the Company shall pay to the
      Participant (or to the Internal Revenue Service on behalf of the
      Participant) in any taxable year for which the excise tax is payable an
      additional payment (a "Gross-Up Payment") in an amount such that after
      payment by the Participant of all taxes (including but not limited to
      federal, state and local income taxes, excise taxes, and FICA taxes
      including hospital insurance taxes) imposed on the Gross-Up Payment, the
      Participant retains (or has had paid to the Internal Revenue Service on
      his or her behalf) an amount of the Gross-Up Payment equal to the sum of

      (a)   the excise tax imposed by section 4999 of the Code, and

      (b)   the product of (i) any deductions disallowed because of the
            inclusion of the Gross-Up Payment in the Participant's adjusted
            gross income, times (ii) the highest applicable marginal rate of
            federal income taxation for the calendar year in which the Gross-Up
            Payment is to be made.

      For purposes of determining the amount of the Gross-Up Payment, the
      Participant shall be deemed to (a) pay federal, state and local income
      taxes (for the residence where the Participant most recently filed a
      return for such taxes) at the highest marginal rate of taxation for the
      calendar year in which the Gross-Up Payment is to be made and (b) have
      otherwise allowable deductions for federal income tax purposes at least
      equal to the Gross-Up Payment.

7.3   [Reserved]

7.4   Determination of Excise Tax: All determinations of gross-up payments that
      are required to be made under section 7.2 hereof shall be made by
      PricewaterhouseCoopers LLP or such other public accounting firm as may be
      retained by the Company prior to the Change of Control. The determination
      by such accounting firm shall be final and conclusive, absent manifest
      error.

7.5   Claim by Internal Revenue Service: As soon as practicable, a Participant
      shall notify the Company in writing of any claim by the Internal Revenue
      Service that, if successful, would result in the imposition of the excise
      tax under section 4999 of the Code. If the Company notifies the
      Participant in writing that it desires to contest such claim, the
      Participant shall cooperate in all reasonable ways with the Company in
      such contest and the Company shall be entitled to participate in all
      proceedings relating to such claim;

                                       12

<PAGE>

      provided, however, that the Company shall bear and pay directly all costs
      and expenses (including additional interest and penalties) incurred in
      connection with such contest and shall indemnify and hold the Participant
      harmless, on an after-tax basis, for any excise tax or income tax
      (including interest and penalties with respect thereto) imposed as a
      result of such representation and payment of costs and expenses. Without
      limitation on the foregoing, the Company shall control all proceedings
      taken in connection with such contest and, at its sole option, may pursue
      or forego any and all administrative appeals, proceedings, hearings and
      conferences with the taxing authority in respect of such claim and may, at
      its sole option, either direct the Participant to pay the tax claimed and
      sue for a refund or contest the claim in any permissible manner, and the
      Participant agrees to prosecute such contest to a determination before any
      administrative tribunal, in a court of initial jurisdiction and in one or
      more appellate courts, as the Company shall determine; provided, however,
      that if the Company directs the Participant to pay such claim and sue for
      a refund, the Company shall advance the amount of such payment to the
      Participant on an interest-free basis, and shall indemnify and hold the
      Participant harmless, on an after-tax basis, from any excise tax or income
      tax (including interest or penalties with respect thereto) imposed with
      respect to such advance or with respect to any imputed income with respect
      to such advance; and provided, further, that if the Participant is
      required to extend the statute of limitations to enable the Company to
      contest such claim, the Participant may limit this extension solely to
      such contested amount. The Company's control of the contest shall be
      limited to issues with respect to the imposition of the excise tax under
      section 4999 of the Code and the Participant shall be entitled to settle
      or contest, as the case may be, any other issue raised by the Internal
      Revenue Service or any other taxing authority.

ARTICLE 8

Miscellaneous

8.1   No Mitigation: No benefit or payment payable hereunder shall be subject to
      offset including, but not limited to, amounts in respect of any claims
      which the Company may have against the Participant, provided, however, the
      amount payable hereunder to any Participant shall be reduced by any
      amounts payable to such Participant from the Company or any affiliate
      pursuant to any other severance plan or policy (including any employment
      agreement).

8.2   Legal Fees: The Company shall reimburse all costs and expenses, including
      attorneys' fees, of the Participant in connection with any legal
      proceedings relating to the Plan, any plan listed on Appendix D, or any
      successor plans; provided, however, the Company shall not reimburse such
      costs and expenses for the Participant if (a) prior to the initiation of
      any proceedings by the Participant, such Participant fails to specify in
      writing all claims relating to the Plan, any plan listed on Appendix D, or
      any successor plans and to provide the Committee with thirty (30) days to
      address such claims, or (b) the judge or other individual presiding over
      the proceedings affirmatively finds that (i) the Participant initiated
      such proceedings in bad faith, or (ii) the Participant violated the terms
      of the Waiver and Release required under section 5.2 hereof or the Waiver
      and General Release required under section 6.5 hereof.

                                       13

<PAGE>

8.3   Successors: If the Company shall be merged into or consolidated with
      another entity, the provisions of this Plan shall be binding upon and
      inure to the benefit of the entity surviving such merger or resulting from
      such consolidation. The Company shall require any successor (whether
      direct or indirect, by purchase, merger, consolidation or otherwise) to
      all or substantially all of the business or assets of the Company to
      expressly assume and agree to perform the duties set forth hereunder in
      the same manner and to the same extent that the Company would be required
      to perform if no such succession had taken place (including but not
      limited to section 8.7 hereof).

8.4   Indemnification. In addition to such other rights of indemnification as
      they may have as members of the Board or the Committee, the members of the
      Board and the Committee shall be indemnified by the Company against all
      costs and expenses reasonably incurred by them in connection with any
      action, suit or proceeding to which they or any of them may be party by
      reason of any action taken or failure to act under or in connection with
      the Plan and against all amounts paid by them in settlement thereof
      (provided such settlement is approved by independent legal counsel
      selected by the Company) or paid by them in satisfaction of a judgment in
      any such action, suit or proceeding, except a judgment based upon a
      finding that such member was not acting in good faith on the reasonable
      belief that he or she was acting in the best interests of the Company;
      provided that upon the institution of any such action, suit or proceeding,
      a Committee or Board member shall, in writing, give the Company notice
      thereof and an opportunity, at its own expense, to handle and defend the
      same before such Committee or Board member undertakes to handle and defend
      it on such member's own behalf.

                                       14

<PAGE>

8.5   Amendments: The Board or the Committee may at any time, or from time to
      time, amend the Plan in whole or in part or amend it in such respects as
      the Board or the Committee may deem appropriate; provided, however, that
      no amendment to the Plan (including the waiver and release agreements
      provided in sections 5.2 and 6.5 hereof) shall, without the affected
      Participant's written consent, impose any obligations on the Participant
      or impair any rights or obligations hereunder except as provided in
      section 4.3 hereof.

8.6   Plan Expenses: Any expenses of administering the Plan shall be borne by
      the Company.

8.7   Survival: Notwithstanding any provision in the Plan to the contrary, the
      obligations hereunder to the Participants which arise due to an
      Anticipatory Change in Control or a Change in Control shall survive any
      termination of the Plan and shall be binding upon the Company.

8.8   Notice: All notices and other communications required or permitted
      hereunder shall be in writing and shall be deemed to have been duly given
      when actually delivered, or five (5) days after deposit in the United
      States mail, certified and return receipt requested, for delivery to

      (a)   the Committee at Allmerica Financial, 440 Lincoln Street, Worcester,
            MA 01653; or

      (b)   the Participant at the last known address specified in the Company's
            records.

8.9   Governing Law: The validity, construction and effect to the Plan and any
      actions taken under or relating to the Plan shall be determined in
      accordance with the laws of the State of Delaware.

                                       15

<PAGE>

                                   APPENDIX A

<PAGE>

                                   APPENDIX B

                               Waiver and Release

In exchange for the benefits and payments offered to me by Allmerica Financial
Corporation as set forth in section 5.1 of The Allmerica Financial Corporation
Employment Continuity Plan (the "Plan"), I hereby release Allmerica Financial
Corporation and all of its past and/or present divisions, affiliates,
subsidiaries, officers, directors, stockholders, trustees, employees, agents,
representatives, administrators, attorneys, insurers, fiduciaries, successors
and assigns, in their individual and/or representative capacities (the
"Company") from any and all causes of action, suits, agreements, promises,
damages, disputes, controversies, contentions, differences, judgments, claims
and demands of any kind whatsoever which I or my heirs, executors,
administrators, successors and assigns ever had, now have or may have against
the Company, whether known or unknown to me, under the Allmerica Financial
Corporation Long-Term Stock Incentive Plan and any successor(s) to such plans,
but only with respect to shares of common stock, stock options or stock
appreciation rights "cashed out" pursuant to Section 5.1 of the Plan ("Stock
Rights").

I represent that I have not filed, and will not hereafter file, any claim
against the Company relating to such Stock Rights.

I understand and agree that if

(i)   I commence, continue, join in , or in any other manner attempt to assert
      any claim released herein against the Company, or otherwise violate the
      terms of this Waiver and Release;

(ii)  without prior written consent from the Company, I disclose to any other
      person or entity any non-public information concerning the Company's
      financial data, strategic business plans, product development (or other
      proprietary product data), customer lists, marketing plans and other
      proprietary information, except for specific items which have become
      publicly available information other than through a breach by me of my
      fiduciary duties to the Company or which cannot reasonably be expected to
      adversely affect the business of the Company, unless required to do so by
      a court of competent jurisdiction or other governmental authority with
      purported or apparent jurisdiction;

(iii) upon termination of employment, I employ, solicit for employment, or
      recommend for employment any officer of the Company during the [for
      Category 1 and Category 2 Participants, the "two year period" and for
      Category 3 Participants the "one year period"] period commencing on the
      date of termination of employment; or

(iv)  I violate the terms of any non-competition or non-solicitation agreement
      between myself and the Company,

the Company shall have the right to the return of the benefits and payments paid
to me by the Company under section 5.1 of the Plan (together with interest
thereon at the rate of six (6)

<PAGE>

percent per annum from the date of receipt by me to the date of payment by me).
Notwithstanding the foregoing, in no event shall this Waiver and Release be
construed to waive or release any rights I may have to be indemnified under the
Company's Charter, By-Laws, other agreements or documents or statutory
provisions providing such indemnification.

I understand and agree that I shall notify the Company in writing, as soon as
practicable, of any claim by the Internal Revenue Service that, if successful,
would result in the imposition of the excise tax under section 4999 of the Code.
I further understand and agree that if the Company notifies me in writing that
it desires to contest such claim, I shall cooperate in all reasonable ways with
the Company in accordance with the provisions of section 7.5 of the Plan.

IN WITNESS WHEREOF, the Company has caused this Waiver and Release to be
executed by a duly authorized officer of the Company and I have executed this
Waiver and Release as of the date set forth below.

                                               _____________________________
                                               Name of Participant

                                               _____________________________
                                               Signature

                                               _____________________________
                                               Date

Allmerica Financial Corporation

By :_________________________

_____________________________
Title

_____________________________
Date

<PAGE>

                                   APPENDIX C

                           Waiver and General Release

In exchange for the benefits and payments offered to me by Allmerica Financial
Corporation as set forth in The Allmerica Financial Corporation Employment
Continuity Plan (the "Plan"), I hereby release Allmerica Financial Corporation
and all of its past and/or present divisions, affiliates, subsidiaries,
officers, directors, stockholders, trustees, employees, agents, representatives,
administrators, attorneys, insurers, fiduciaries, successors and assigns, in
their individual and/or representative capacities (the "Company") from any and
all causes of action, suits, agreements, promises, damages, disputes,
controversies, contentions, differences, judgments, claims and demands of any
kind whatsoever which I or my heirs, executors, administrators, successors and
assigns ever had, now have or may have against the Company, whether known or
unknown to me, by reason of my employment and/or cessation of employment with
the Company or otherwise involving facts relating to such employment which
occurred on or prior to the date that I have signed this Release, including
without limitation all claims under Title VII of the Civil Rights Act of 1964,
the Age Discrimination in Employment Act of 1967, the Reconstruction Era Civil
Rights Act, the Civil Rights Act of 1991, the Fair Labor Standards Act, the
Employee Retirement Income Security Act, the Americans with Disabilities Act,
the Family and Medical Leave Act of 1993, and any and all other federal, state
and local laws, statutes, rules and regulations pertaining to employment, as
well as any and all claims under state contract or tort law.

I represent that I have not filed, and will not hereafter file, any claim
against the Company relating to my employment and/or cessation of employment
with the Company, or otherwise specified above involving facts which occurred on
or prior to the date that I have signed this Waiver and General Release.

I understand and agree that if

(i)   I commence, continue, join in, or in any other manner attempt to assert
      any claim released herein against the Company, or otherwise violate the
      terms of this Waiver and General Release,

(ii)  without prior written consent from the Company, I disclose to any other
      person or entity any non-public information concerning the Company's
      financial data, strategic business plans, product development (or other
      proprietary product data), customer lists, marketing plans and other
      proprietary information, except for specific items which have become
      publicly available information other than through a breach by me of my
      fiduciary duties to the Company or which cannot reasonably be expected to
      adversely affect the business of the Company, unless required to do so by
      a court of competent jurisdiction or other governmental authority with
      purported or apparent jurisdiction;

(iii) I employ, solicit for employment, or recommend for employment any officer
      of the Company during the [for Category 1 and Category 2 Participants, the
      "two year period" and for Category 3 Participants the "one year period"]
      commencing on the date of

<PAGE>

      termination of employment; or

(iv)  I violate the terms of any noncompetition and nonsolicitation agreement
      between myself and the Company,

the Company shall have the right to the return of the benefits and payments paid
to me by the Company under the Plan (together with interest thereon at the rate
of six (6) percent per annum from the date of receipt by me to the date of
payment by me).

Notwithstanding the foregoing, in no event shall this Waiver and Release be
construed to waive or release any rights I may have to be indemnified under the
Company's Charter, By-Laws, other agreements or documents or statutory
provisions providing such indemnification.

I also agree to respond to questions and/or inquiries and provide other
information concerning matters that were within the ambit of my responsibilities
during my employment with the Company. It is anticipated that most matters will
be addressed through phone calls and/or e-mails.

I understand and agree that I shall notify the Company in writing, as soon as
practicable, of any claim by the Internal Revenue Service that, if successful,
would result in the imposition of the excise tax under section 4999 of the Code.
I further understand and agree that if the Company notifies me in writing that
it desires to contest such claim, I shall cooperate in all reasonable ways with
the Company in accordance with the provisions of section 7.5 of the Plan.

I have read this Waiver and General Release carefully, have been given at least
21 days to consider all of its terms, have been advised to consult with an
attorney and any other advisors of my choice, and fully understand that by
signing below I am, to the extent provided herein, giving up any right which I
may have to sue or bring any other claims against the Company. I have not been
forced or pressured in any manner whatsoever to sign this Waiver and General
Release, and I agree to all of its terms voluntarily.

I understand that I have seven days from the date I have signed this Waiver and
General Release below to revoke this Waiver and General Release, that this
Waiver and General Release will not become effective until the 8th day following
the date that I have signed this Waiver and General Release, and that the
Company will have no obligation to pay me the benefits and payments under the
Plan as agreed unless this Waiver and General Release becomes effective.

I further understand that this Waiver and General Release is the complete and
exclusive statement of its terms and any waiver prior to the date of my
signature below with respect to the Plan shall be without further force or
effect on the effective date of this Waiver and General Release.

IN WITNESS WHEREOF, the Company has caused this Waiver and General Release to be
executed by a duly authorized officer of the Company and I have executed this
Waiver and General Release as of the date set forth below.

                                 ______________________________

<PAGE>

                                 Name of Participant

                                 ______________________________      ___________
                                 Signature                           Date

Allmerica Financial Corporation

By :_________________________

_____________________________
Title

_____________________________
Date

<PAGE>

                                   APPENDIX D

First Allmerica Financial Life Insurance Company Non-Qualified Executive
Deferred Compensation Plan

First Allmerica Financial Life Insurance Company Non-Qualified Executive
Retirement Plan

First Allmerica Financial Life Insurance Company Excess Benefit Retirement Plan

First Allmerica Financial Life Insurance Company Deferred Compensation
Agreements<PAGE>

                                                                    Exhibt 10.23

                         ALLMERICA FINANCIAL CORPORATION

                     AMENDED LONG-TERM STOCK INCENTIVE PLAN

      Section 1. Purpose. The Allmerica Financial Long-Term Stock Incentive Plan
(the "Plan") has been adopted to encourage and create significant ownership of
the Company's Common Stock among executive officers, other key employees and
certain insurance agents and brokers of the Company and its Subsidiaries and
Affiliates. The Plan may be adopted by any Subsidiary of the Company, including,
but not limited to, First Allmerica Financial Life Insurance Company, The
Hanover Insurance Company and Citizens Insurance Company of America. Any
Subsidiary adopting the Plan agrees to adhere to the terms and conditions of the
Plan as set forth below. Additional purposes of the Plan include:

      (a) To provide a meaningful incentive to Participants for making
substantial contributions to the Company's long-term business growth;

      (b) To enhance the Company's and its Subsidiaries' ability to attract and
retain executive officers, other key employees and certain insurance agents and
brokers who will make such contributions; and

      (c) To closely align the interests of these executive officers and other
key employees with those of Company stockholders by providing opportunities for
them to obtain significant longer term rewards through stock ownership.

      Section 2. Definitions.

      (a) "Affiliate" means any entity, other than a Subsidiary, that is
directly or indirectly controlled by the Company or in which the Company has a
significant equity interest as determined by the Committee.

      (b) "Award" means any Stock Option, Stock Appreciation Right or Stock
Award granted under the Plan.

      (c) "Board" means the Company's Board of Directors.

      (d) "Cause" shall mean (i) the willful failure by the Participant to
perform substantially the Participant's duties as an employee of the Company
(other than due to physical or mental illness), (ii) the Participant's engaging
in serious misconduct that is injurious to the Company, any Subsidiary or any
Affiliate, (iii) the Participant's having been convicted of, or entered a plea
of nolo contendere to, a crime that constitutes a felony, (iv) the breach by the
Participant of any written or unwritten covenant or agreement not to compete
with the Company, any Subsidiary or any Affiliate or (v) the breach by the
Participant of his or her duty of loyalty to the Company, any Subsidiary or any
Affiliate.

<PAGE>

      (e) "Change in Control" means the occurrence of any of the following
events: (i) the members of the Board at the beginning of any consecutive
twenty-four calendar month period (the "Incumbent Directors") cease for any
reason other than due to death or retirement to constitute at least a majority
of the members of the Board, provided that any director whose election or
nomination for election by the Company's stockholders was approved by a vote of
a least a majority of the members of the Board at the beginning of such
twenty-four calendar month period shall be treated as an Incumbent Director;
(ii) any "person" including a "group" (as such terms are used in Section 13(d)
and 14(d)(2) of the 1934 Act, but excluding the Company, any of its
Subsidiaries, any employee benefit plan of the Company or any of its
Subsidiaries) is or becomes the "beneficial owner" (as defined in Rule 13(d)(3)
under the 1934 Act), directly or indirectly, of securities of the Company
representing 35% or more of the combined voting power of the Company's then
outstanding securities; or (iii) the stockholders of the Company shall approve a
definitive agreement (1) for the merger or other business combination of the
Company with or into another corporation, a majority of the directors of which
were not directors of the Company immediately prior to the merger or other
business combination and in which the stockholders of the Company immediately
prior to the effective date of such merger or other business combination own
less than 50% of the voting power in such corporation and such merger or other
business combination is consummated or (2) for the sale or other disposition of
all or substantially all of the assets of the Company.

      (f) "Change in Control Price" means the highest price per Share offered in
conjunction with any transaction resulting in a Change in Control (as determined
in good faith by the Committee if any part of the offered price is payable other
than in cash) or, in the case of a Change in Control occurring solely by reason
of a change in the composition of the Board, the highest Fair Market Value of
the Stock on any of the 30 trading days immediately preceding the date on which
a Change in Control occurs.

      (g) "Code" means the Internal Revenue Code of 1986, as amended from time
to time.

      (h) "Committee" means a committee of not less than two non-employee
members of the Board, appointed by the Board to administer the Plan. The
Committee shall be comprised of members who qualify to administer this Plan as
contemplated by Rule 16b-3 under the 1934 Act (or any successor rule thereto).

      (i) "Common Stock" means the common stock, par value $.01 per share, of
the Company.

      (j) "Company" means Allmerica Financial Corporation, a corporation
established under the laws of the State of Delaware.

      (k) "Disability" shall mean long-term disability as defined under the
terms of the Company's or any Subsidiaries' applicable long term disability
plans or policies.

                                       2

<PAGE>

      (l) "Early Retirement" with respect to a Participant shall mean retirement
under any qualified pension plan maintained by the Company or any of its
Subsidiaries or Affiliates at or after the earliest age at which a Participant
may retire and receive an immediate, but actuarially reduced, retirement benefit
under such plan. If a Participant is not a participant in such a plan, "Early
Retirement" shall mean retirement at or after age 55 with at least 15 years of
service with the Company or a Subsidiary.

      (m) "Fair Market Value" means, with respect to Common Stock, the fair
market value of a Share as determined by the Committee in good faith in such
manner as shall be established by the Committee from time to time; provided that
at any time that the Common Stock is traded on an established securities market,
Fair Market Value means the last reported sale price at which the Common Stock
is traded on such date or, if no Common Stock is traded on such date, the most
recent date on which Common Stock was traded, as reflected on such public
market. Under no circumstances shall the Fair Market Value be less than the par
value of the Common Stock.

      (n) "Incentive Stock Option" or "ISO" means a Stock Option to purchase
Shares awarded to a Participant which is intended to meet the requirements of
Section 422 of the Code or any successor provision.

      (o) "Non-Qualified Stock Option" or "NQSO" means a Stock Option to
purchase Shares of Common Stock awarded to a Participant which is not intended
to meet the requirements of Section 422 of the Code or any successor provision.

      (p) "1934 Act" means the Securities Exchange Act of 1934, as amended from
time to time.

      (q) "Normal Retirement" with respect to a Participant shall mean
retirement under any qualified pension plan maintained by the Company or any of
its Subsidiaries or Affiliates at or after the earliest age at which a
Participant may retire and receive a retirement benefit under such plan without
an actuarial reduction for early commencement of benefits. If a Participant is
not a participant in such a plan, "Normal Retirement" shall mean retirement at
or after age 65 with no minimum service requirement.

      (r) "Participant" means a person selected by the Committee (or its
delegate as provided under Section 4) to receive an Award under the Plan.

      (s) "Reporting Person" means an individual who is subject to Section 16 of
the 1934 Act by virtue of his or her relationship with the Company.

      (t) "Senior Management" means the executive officers (within the meaning
of Rule 3b-7 under the 1934 Act) of the Company from time to time, whether such
persons are officers of the Company or of a Subsidiary.

                                        3

<PAGE>

      (u) "Shares" means shares of the Common Stock of the Company.

      (v) "Stock Appreciation Right" or "SAR" means an Award in the form of a
right to receive a payment equal to the excess of Fair Market Value as of the
date of exercise over the base value of the SAR.

      (w) "Stock Award" means an Award to a Participant comprised of Common
Stock or valued by reference to Common Stock granted under Section 7 of the
Plan.

      (x) "Stock Option" means an Award in the form of the right to purchase a
specified number of Shares at a specified price during a specified period.

      (y) "Subsidiary" shall mean any entity of which the Company possesses
directly or indirectly fifty percent (50%) or more of the total combined voting
power of all classes of stock of such entity.

      Section 3. Effective Date. Subject to the approval of the stockholders of
the Company, the Plan shall be effective as of May 22, 1996. Senior Management,
however, shall not be eligible to participate until the later of the date the
Board adopts the Plan with respect to Senior Management or October 17, 1996. No
Awards may be made under the Plan after ten years from the effective date or
earlier termination of the Plan by the Board.

      Section 4. Administration. The Plan shall be administered by the
Committee. The Committee shall have the authority to adopt, alter and repeal
such administrative rules, guidelines and practices governing the operation of
the Plan as it shall from time to time consider advisable. The Committee shall
also have full discretion to interpret the provisions of the Plan. Any decision
or action taken or to be taken by the Committee, arising out of or in connection
with the construction, administration, interpretation and effect of the Plan and
of its rules and regulations, shall, to the maximum extent permitted by
applicable law, be within its absolute discretion (except as otherwise
specifically provided herein) and shall be conclusive and binding upon all
Participants and any person claiming under or through any Participant. To the
extent permitted by applicable law and the provisions of the Plan, the Committee
may delegate to one or more employee members of the Board the power to make
Awards to Participants who are not Reporting Persons.

      Section 5. Eligibility. Any executive officer or other key employee
(including, without limitation, insurance agents, brokers and independent
agents) of the Company, any Subsidiary or any Affiliates shall be eligible to
receive an Award under the Plan, provided that such participation would not
jeopardize (i) the Plan's compliance with Rule 16b-3 under the 1934 Act or any
successor rule, and (ii) the Company's ability to register shares underlying the
Plan on Registration Statements on Form S-8 pursuant to the Securities Act of
1933, as amended, or any successor form. Directors who are not employees shall
not be eligible to be granted Awards under the Plan.

                                        4

<PAGE>

      Section 6. Stock Available for Awards.

      (a) Common Shares Available. The maximum number of Shares available for
Awards under the Plan with respect to each fiscal year the Plan is in effect
will be 3.25% of the total Shares of outstanding Common Stock of the Company as
of the start of each such fiscal year plus any Shares available for Awards under
the Plan in prior fiscal years but not used. Shares of Common Stock underlying
any Awards which are forfeited, canceled, reacquired by the Company, satisfied
without the issuance of Common Stock or otherwise terminated (other than by
exercise) shall be added back to the Shares of Common Stock available for
issuance under the Plan. Shares available for issuance under the Plan may be
drawn from the Company's Treasury Stock account.

      (b) Share Usage Limits. For the period that the Plan is in effect, the
aggregate number of Shares that may be issued on exercise of Stock Options and
as Stock Awards shall be as follows: (i) an amount equal to the sum of (a) five
percent (5%) of the number of Shares outstanding at the close of business on May
20, 1997, plus (b) an amount, not to exceed 1,172,000 Shares, equal to the
number of Shares underlying Awards granted under the Plan and not surrendered as
of May 20, 1997; and (ii) thereafter, commencing with the annual meeting of
shareholders in 1998, increasing annually the maximum number of Shares that may
be issued under the Plan by an amount equal to one and one-quarter percent
(1.25%) of the number of Shares outstanding at the close of business on the day
of each annual meeting of shareholders up to and including the 1998 annual
meeting of shareholders and to increase annually thereafter on the first day of
each fiscal year the maximum number of Shares that may be issued by an amount
equal to one and one-quarter percent (1.25%) of the number of Shares outstanding
as of the start of each fiscal year commencing on January 1, 1999 and continuing
on the first day of each fiscal year for the balance of the term of the Plan.
Additionally, the aggregate number of Shares that may be covered by Awards for
any one Participant over the period that the Plan is in effect shall not exceed
1,730,638 Shares.

      (c) Adjustments. In the event of any stock dividend, stock split,
combination or exchange of Shares, merger, consolidation, spin-off or other
distribution (other than normal cash dividends) of Company assets to
stockholders, or any other change affecting Shares, such proportionate
adjustments, if any, as the Committee in its discretion may deem appropriate to
reflect such change shall be made with respect to (i) the aggregate number of
Shares that may be issued under the Plan; (ii) the number of Shares covered by
each outstanding Award made under the Plan; and (iii) the option, base or
purchase price per Share for any outstanding Stock Options, Stock Appreciation
Rights and other Awards granted under the Plan, provided that any such actions
are consistently and equitably applicable to all affected Participants. In
addition, any Shares issued by the Company through the assumption or
substitution of outstanding grants or grant commitments from an acquired entity
shall not reduce the Shares available for issuance under the Plan.

                                       5

<PAGE>

      Section 7. Awards.

      (a) General. The Committee (or its delegate, as permitted under Section
4), shall determine the type or types of Award(s) (as set forth below) to be
made to each Participant and shall approve the terms and conditions of all such
Awards in accordance with Sections 4 and 8 of the Plan. Awards may be granted
singularly, in combination, or in tandem such that the settlement of one Award
automatically reduces or cancels the other. Awards may also be made in
replacement of, as alternatives to, or as form of payment for grants or rights
under any other employee compensation plan or arrangement of the Company,
including the plans of any acquired entity.

      (b) Stock Option. A Stock Option shall confer on a Participant the right
to purchase a specified number of Shares from the Company subject to the terms
and conditions of the Stock Option grant. Stock Options may be in the form of
ISOs or NQSOs. The terms and conditions of ISOs shall be subject to and comply
with Section 422 of the Code, or any successor provision, and any regulations
thereunder. Anything in the Plan notwithstanding, no term of the Plan relating
to ISOs shall be interpreted, amended or altered, nor shall any discretion or
authority granted to the Committee under the Plan be so exercised, so as to
disqualify the Plan or, without the consent of the optionee, any ISO granted
under the Plan, under Section 422 of the Code. The Committee shall establish the
option price at the time each Stock Option is awarded, provided that such price
shall not be less than 100% of the Fair Market Value of the Common Stock on the
date the Stock Option is granted. If a Participant owns or is deemed to own (by
reason of the attribution rules applicable under Section 424(d) of the Code)
more than 10% of the combined voting power of all classes of stock of the
Company or any subsidiary or parent corporation and an ISO is awarded to such
Participant, the option price shall not be less than 110% of the Fair Market
Value at the time such ISO is awarded. The aggregate Fair Market Value at time
of grant of the Shares covered by ISOs exercisable by any one optionee in any
calendar year shall not exceed $100,000 (or such other limit as may be required
by the Code). The maximum number of Shares that may be issued as ISOs is
2,350,000 Shares.

      Each Stock Option shall be exercisable at such times and subject to such
terms and conditions as the Committee may specify at or after the time of grant;
provided, however, that if the Committee does not establish a different exercise
schedule at or after the date of grant of a Stock Option, such Stock Option
shall become exercisable in five approximately equal annual installments on each
of the first, second, third, fourth and fifth anniversaries of the date the
Stock Option is granted. A Stock Option shall not be exercisable after the
expiration of ten years from the date of grant. The recipient of a Stock Option
shall pay the exercise price for the Shares in cash or pursuant to such other
arrangements as are satisfactory to the Committee, including, without
limitation, using Shares valued at Fair Market Value on the date of exercise.
The Committee may also permit Participants to have the option price delivered to
the Company by a broker pursuant to an arrangement whereby the Company, upon
irrevocable instructions from a Participant, delivers the exercised Shares to
the broker. A Stock Option may include forfeitability contingencies based on
continued employment with the Company or a Subsidiary. In addition, a violation
of a continued employment provision may entitle the Company or a Subsidiary to
repurchase the Shares obtained through the Stock Option at the original exercise

                                        6

<PAGE>

price, without interest.

      Unless the Committee shall otherwise permit a Stock Option to remain
exercisable for such greater or lesser period (but not beyond its otherwise
stated term) as the Committee shall specify at or after the grant of such Stock
Option, a Stock Option shall be exercisable following the termination of a
Participant's employment with the Company and each Subsidiary and Affiliate only
to the extent provided in this paragraph. If a Participant's employment
terminates due to the Participant's death, Disability, Normal Retirement or
Early Retirement with the consent of the Committee, the Participant (or, in the
event of the Participant's death or Disability during employment or during the
period during which a Stock Option is exercisable under this sentence, the
Participant's beneficiary or legal representative) may exercise any Option held
by the Participant at the time of such termination, regardless of whether then
exercisable, for up to three years (or such greater or lesser period as the
Committee shall determine at or after grant) following the date of such
termination, but in no event after the date the Stock Option otherwise expires.
If a Participant's employment is terminated for Cause or, if following the
Participant's termination of employment, the Committee determines that the
Participant's employment could have been terminated for Cause, all Stock Options
held by the Participant shall immediately terminate, regardless of whether then
exercisable and any Stock Option exercised by the Participant in anticipation of
his/her For Cause termination shall be rescinded and the stock returned to the
Company and/or its Subsidiary and the exercise price returned to the
Participant. Any option exercised 60 days before notice of termination and all
options exercised after notice of termination shall be considered to be
exercised in anticipation of termination.

      (c) Stock Appreciation Rights (SARs). An SAR grant shall confer on a
Participant the right to receive in Shares, cash or a combination, up to the
positive difference, if any, between the Fair Market Value of a designated
number of Shares when the SARs are exercised and the base price of the SAR
contained in the terms and conditions of the Award. The Committee shall have the
authority to grant an SAR in tandem with a Stock Option, in addition to a Stock
Option, or freestanding and unrelated to a Stock Option. An SAR granted in
tandem or in addition to a Stock Option may be granted either at the same time
as the Stock Option or at a later time. An SAR shall not be exercisable after
the expiration of ten years from the date of grant. Shares issued in settlement
of the exercise of SARs shall be valued at their Fair Market Value on the date
of exercise.

      The Committee shall establish the base price of the SAR at the time the
SARs are awarded; provided that the price of an SAR shall not be less than 100%
of the Fair Market Value of Common Stock on the date the SAR is granted. The
Committee shall determine the time or times at which or the event or events
(including, without limitation, a Change in Control) upon which an SAR may be
exercised in whole or in part; provided, however, that unless otherwise
specified by the Committee at or after grant, an SAR granted in tandem with a
Stock Option shall be exercisable at the same time or times as the related Stock
Option is exercisable.

      (d) Stock Awards. A Stock Award shall confer on a Participant the right to
acquire a specified number of Shares for a purchase price (which may be zero) or
the right to receive a

                                       7

<PAGE>

cash equivalent payment or a combination of both subject to the terms and
conditions of the Award, which must include forfeitability contingencies based
on continued employment with the Company or a Subsidiary or on meeting
performance criteria or both. A Stock Award based on continued employment must
have a minimum vesting period of three years from the date of the Stock Award
and a Stock Award based on performance must have a minimum vesting period of one
year from the date of the Stock Award. The minimum vesting provision may not,
under any circumstances, be waived. A Stock Award may be in the form of Shares
or share units. In no event shall more than 25% of the total amount of Shares
available under the Plan be granted as Stock Awards. Such 25% limit shall be
subject to the replenishment provision in Section 6(a).

      If the vesting of a Stock Award is conditioned in whole or in part upon
the attainment of specified performance goals or targets (or if the vesting of a
Stock Award that will vest upon the passage of time and the Participant's
continued employment is accelerated upon the attainment of such goals or
targets), such goals and targets shall be determined by the Committee and set
forth in the specific Award agreements. Such performance goals or targets may be
related to the performance of (i) the Company; (ii) a Subsidiary or an
Affiliate, (iii) a division or unit of the Company, any Subsidiary or any
Affiliate, (iv) the Participant or (v) any combination of the foregoing, over a
performance period or periods established by the Committee. Except to the extent
otherwise expressly provided herein, the Committee may, at any time and from
time to time, change the performance objectives applicable with respect to any
Stock Award to reflect such factors, including, without limitation, changes in a
Participant's duties or responsibilities or changes in business objectives
(e.g., from corporate to Subsidiary or business unit performance or vice versa),
as the Committee shall deem necessary or appropriate. In making any such
adjustment, the Committee shall adjust the number of Shares subject to any such
Stock Award or take other appropriate actions to prevent any enlargement or
diminution of the Participant's rights related to service rendered and
performance attained prior to the effective date of such adjustment.

      Unless the Committee otherwise determines at or after grant, the rights of
a Participant with respect to a Stock Award outstanding at the time of the
Participant's termination of employment with the Company and each Subsidiary and
Affiliate shall be determined pursuant to this paragraph. In the event that a
Participant's employment terminates due to the Participant's (i) death, (ii)
disability, (iii) retirement; or, (iv) early retirement with the consent of the
Committee, a pro-rated portion of any unvested Shares subject to a Stock Award
shall become vested based on the number of days the Participant actually worked
since the date the Stock Award was granted (or in the case of any award which
becomes vested in installments, since the date, if any, on which the last
installment of such Stock Award became vested); provided that, in the case of an
award with respect to which the restrictions will lapse, if at all, based on the
attainment of performance goals or targets, such vesting shall be deferred until
the end of the applicable performance period and be based on that number of
Shares of such Stock Award, if any, that would have been earned based on the
attainment or partial attainment of such performance goals or targets. Any
portion of any Stock Award that has not vested at the date of a Participant's
termination of employment (or which does not become vested until after such date
under the preceding sentence) shall be forfeited as of such termination date
(or, if applicable,

                                       8

<PAGE>

such deferred vesting date).

      Section 8. General Provisions Applicable to Awards.

      (a) Transferability and Exercisability. Unless the Committee shall permit
(on such terms and conditions as it shall establish) an Award to be transferred
to a member of the Participant's immediate family, a Guardian, or to a trust or
similar vehicle for the benefit of such immediate family members ("Permitted
Transferees"), any Award under this Plan will be non-transferable and
accordingly shall not be assignable, alienable, saleable or otherwise
transferable by the Participant other than by will or the laws of descent and
distribution; provided, however, that in no event shall the Committee permit any
Award to be transferable if the effect thereof would be to cause any other
nontransferable Award to fail to qualify for the exemptive relief available
under Rule 16b-3 promulgated under the 1934 Act. Notwithstanding the foregoing,
a Participant who has retired in accordance with the definitions of Early
Retirement or Normal Retirement may assign vested options to Permitted
Transferees. During the Participant's lifetime, only the Participant (or the
Participant's Permitted Transferees, if any) shall be able to exercise any Stock
Option or SAR awarded to the Participant. If so permitted by the Committee, a
Participant may designate a beneficiary or beneficiaries to exercise the
Participant's rights and receive any distribution under this Plan upon the
Participant's death.

      (b) General Restriction. Each Award shall be subject to the requirement
that, if at any time the Committee shall determine, in its sole discretion, that
the listing, registration, exemption or qualification of any Award under the
Plan upon any securities exchange or under any state or federal law, or the
consent or approval of any government regulatory body, is necessary or desirable
as a condition of, or in connection with, the granting of such Award or the
grant or settlement thereof, such Award may not be exercised or settled in whole
or in part unless such listing, registration, qualification, exemption, consent
or approval has been effected or obtained free of any conditions not acceptable
to the Committee.

      (c) Tax Withholding. The Company or any Subsidiary which adopts the Plan
shall have the right to deduct from any settlement of an Award, including the
delivery or vesting of Shares, made under the Plan, a sufficient amount to cover
withholding of any federal, state or local taxes required by law or to take such
other actions as may be necessary to satisfy any such withholding obligations.
The Committee may require or permit Shares to be used to satisfy required tax
withholding and such Shares shall be valued at their Fair Market Value on the
date the tax withholding is effective.

      (d) Documentation of Grants. Awards made under the Plan shall be evidenced
by written agreements or such other appropriate documentation as the Committee
shall prescribe. Any written agreement or other such documentation shall be
delivered to the Participant and shall incorporate the terms of the Plan by
reference and specify the terms and conditions thereof and any rules applicable
thereto. The Committee need not require the execution of any instrument or
acknowledgment of notice of an Award under the Plan, in which case acceptance of
such Award by the respective Participant will constitute agreement to the terms
of the Award

                                       9

<PAGE>

and acceptance of the Award in accordance with the terms of this Agreement.

      (e) Settlement. The Committee shall determine whether Awards are settled
in whole or in part in cash, Shares or other Awards. The Committee may require
or permit a Participant to defer all or any portion of a payment under the Plan,
including the crediting of interest on deferred amounts denominated in cash.

      (f) Change in Control. Except as provided below, in the event of a Change
in Control, each Stock Option (including, for this purpose, any SAR granted in
tandem with such Stock Option) and each freestanding SAR (whether or not then
exercisable) shall be cancelled in exchange for a payment in cash of an amount
equal to the excess of the Change in Control Price (or, in the case of any ISO,
the excess of the Fair Market Value on the date of exercise) over the exercise
or base price thereof and all Stock Awards shall become nonforfeitable.
Notwithstanding the immediately preceding sentence, no cancellation, cash
settlement or acceleration of vesting shall occur with respect to any Award or
any class of Awards if the Committee reasonably determines in good faith prior
to the occurrence of a Change in Control that such Award or Awards shall be
honored or assumed, or new rights substituted therefor (such honored, assumed or
substituted award hereinafter called an "Alternative Award"), by a Participant's
employer (or the parent or a subsidiary of such employer) immediately following
the Change in Control, provided that any such Alternative Award must:

      (i) be based on stock which is traded on an established securities market,
or which will be so traded within 60 days of the Change in Control;

      (ii) provide such Participant (or each Participant in a class of
Participants) with rights and entitlements substantially equivalent to or better
than the rights, terms and conditions applicable under such Award, including,
but not limited to, an identical or better exercise or vesting schedule and
identical or better timing and methods of payment;

      (iii) have substantially equivalent economic value to such Award
(determined at the time of the Change in Control); and

      (iv) have terms and conditions which provide that in the event that the
Participant's employment is involuntarily terminated or constructively
terminated, any conditions on a Participant's rights under, or any restrictions
on transfer or exercisability applicable to, each such Alternative Award shall
be waived or shall lapse, as the case may be.

      For this purpose, a constructive termination shall mean a termination by a
Participant following a material reduction in the Participant's compensation, a
material reduction in the Participant's responsibilities or the relocation of
the Participant's principal place of employment to another location, in each
case without the Participant's written consent.

                                       10

<PAGE>

      Section 9. Miscellaneous.

      (a) Plan Amendment. The Board or the Committee may amend the Plan as it
deems necessary or appropriate to better achieve the purposes of the Plan,
except that no amendment without the approval of the Company's stockholders
shall be made which would (i) increase the total number of Shares available for
issuance under the Plan, (ii) materially increase the benefits accruing to
Participants under the Plan, or (iii) materially modify the requirements as to
eligibility for participation in the Plan.

      (b) No Right to Employment. No person shall have any claim or right to be
granted an Award, and the grant of an Award shall not be construed as giving a
Participant the right to continued employment. The Company expressly reserves
the right at any time to dismiss a Participant free from any liability or claim
under the Plan, except as expressly provided by an applicable agreement or other
documentation of an Award.

      (c) No Rights as Shareholder. Only upon issuance of Shares to a
Participant (and only in respect to such Shares) shall the Participant obtain
the rights of a shareholder, subject, however, to any limitations imposed by the
terms of the applicable Award.

      (d) No Fractional Shares. No fractional shares shall be issued under the
Plan, however, the Committee may provide for a cash payment as settlement in
lieu of any fractional shares.

      (e) Other Company Benefit and Compensation Programs. Except as expressly
determined by the Committee, settlements of Awards received by Participants
under this Plan shall not be deemed as part of a Participant's regular,
recurring compensation for purposes of calculating payments or benefits from any
Company or Subsidiary benefit or severance program (or severance pay law of any
country). The above programs notwithstanding, the Company may adopt other
compensation plans or arrangements as it deems appropriate or necessary.

      (f) Unfunded Plan. The Plan shall be unfunded and shall not create (or be
construed to create) a trust or a separate fund(s). Likewise, the Plan shall not
establish any fiduciary relationship between the Company, any Subsidiary or
Affiliate and any Participant or other person. To the extent any person holds
any rights by virtue of an Award granted under the Plan, such rights shall be no
greater than the rights of an unsecured general creditor of the Company, any
Subsidiary or Affiliate.

      (g) Successors and Assignees. The Plan shall be binding on all successors
and assignees of a Participant, including, without limitation, the estate or
beneficiaries of such Participant and the executor, administrator or trustee of
such estate, or any receiver or trustee in bankruptcy or representative of the
Participant's creditors.

      (h) Governing Law. The validity, construction and effect to the Plan and
any actions

                                       11

<PAGE>

taken under or relating to the Plan shall be determined in accordance with the
laws of the State of Delaware.

                                       12

<PAGE>

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