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right to pay “contract value”, Mr. Farnsworth or his estate could
attempt to sell his district manager position to a successor
nominee acceptable to Farmers for an amount not exceeding
"contract value".
The amount of the "contract value" referred to in the DMAA
was based upon a schedule that took into account (1) the service
commission overwrite paid to the district manager during the 6
months immediately preceding termination, and (2) the number of
years of service completed by the district manager. In the case
of Mr. Farnsworth, who had worked for more than 20 years as a
district manager at the time of termination, the DMAA provided
for a “contract value” of seven times the last 6 months’ service
commission overwrite.
The DMAA specified that all lists and records of any kind
pertaining to policyholders or expirations, and also the
information contained therein, were the secret and confidential
property of Farmers and were never to be used or divulged by Mr.
Farnsworth. All policy rights remained the property of Farmers.
Mr. Farnsworth had no rights or privileges in the continuing
effectiveness of the policies produced for Farmers. Mr.
Farnsworth had no interest, assignable or otherwise, in the
district or in the DMAA, except as to the “contract value”
payments upon termination without cause.
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Last modified: May 25, 2011