<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
Small Cap Value Fund, A Series of Allmerica Investment Trust
(Name of Registrant as Specified in its Charter)
Small Cap Value Fund, A Series of Allmerica Investment Trust
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
4) Proposed maximum aggregate value of transaction:
* Set forth amount on which the filing is calculated and state how it was
determined.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount previously paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
Notes:
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SMALL CAP VALUE FUND
OF
ALLMERICA INVESTMENT TRUST
440 LINCOLN STREET
WORCESTER, MA 01653
NOTICE OF SPECIAL MEETING
To the Shareholders:
Notice is hereby given that a Special Meeting (the "Meeting") of
Shareholders of the Small Cap Value Fund (the "Fund"), a separate series of
Allmerica Investment Trust (the "Trust"), will be held June 27th, 1995, at 10:00
a.m., Eastern Daylight Time, at the offices of Allmerica Investment Management
Company, Inc. ("AIMCO"), 440 Lincoln Street, Worcester, MA 01653. At the
Meeting, you and the other Shareholders of the Fund will be asked to consider
and vote:
1. To approve or disapprove a new Sub-Adviser Agreement between AIMCO and
David L. Babson and Company Incorporated ("D.L. Babson") pursuant to which D.L.
Babson will act as sub-adviser with respect to the assets of the Fund, to become
effective upon the acquisition of the stock of D.L. Babson by an affiliate of
Massachusetts Mutual Life Insurance Company;
2. To approve or disapprove the existing Sub-Adviser Agreement (the
"Existing Sub-Adviser Agreement") between AIMCO and D.L. Babson dated April 30,
1993 and to ratify the payment of fees by AIMCO to D.L. Babson from April 30,
1995 to the date of the Meeting pursuant to the Existing Sub-Adviser Agreement;
and
3. To transact such other business as may properly come before the Meeting
or any adjournments thereof.
Shareholders of record at the close of business on May 10, 1995 are
entitled to notice of, and to vote at, the Meeting. Your attention is called to
the accompanying Proxy Statement. Regardless of whether you plan to attend the
Meeting, PLEASE COMPLETE, SIGN AND RETURN PROMPTLY THE ENCLOSED PROXY CARD so
that a quorum will be present and a maximum number of shares may be voted. If
you are present at the Meeting, you may change your vote, if desired, at that
time.
By Order of the Board of Trustees
George M. Boyd
Secretary
Worcester, MA
June 1, 1995
<PAGE>
SMALL CAP VALUE FUND
OF
ALLMERICA INVESTMENT TRUST
440 LINCOLN STREET
WORCESTER, MA 01653
PROXY STATEMENT
This Proxy Statement is furnished by Allmerica Investment Trust (the
"Trust") to the Shareholders of its Small Cap Value Fund (the "Fund") on behalf
of the Trust's Board of Trustees in connection with the Fund's solicitation of
the accompanying proxy, to be voted at a Special Meeting of Shareholders of the
Fund (the "Meeting") to be held on June 27th, 1995, at 10:00 a.m., Eastern
Daylight Time, at the offices of Allmerica Investment Management Company, Inc.
("AIMCO"), 440 Lincoln Street, Worcester, MA 01653, for the purposes set forth
below and in the accompanying Notice of Special Meeting. The approximate mailing
date of this Proxy Statement is June 1, 1995. At the Meeting the Shareholders of
the Fund will be asked:
1. To approve or disapprove a new Sub-Adviser Agreement between AIMCO and
David L. Babson and Company Incorporated ("D.L. Babson") pursuant to which D.L.
Babson will act as sub-adviser with respect to the assets of the Fund, to become
effective upon the acquisition of the stock of D.L. Babson by an affiliate of
Massachusetts Mutual Life Insurance Company ("MassMutual");
2. To approve or disapprove the existing Sub-Adviser Agreement (the
"Existing Sub-Adviser Agreement") between AIMCO and D.L. Babson dated April 30,
1993 and to ratify the payment of fees by AIMCO to D.L. Babson from April 30,
1995 to the date of the Meeting pursuant to the Existing Sub-Adviser Agreement;
and
3. To transact such other business as may properly come before the Meeting
or any adjournments thereof.
A Shareholder may revoke the accompanying proxy at any time prior to
its use by filing with the Secretary of the Trust a written revocation or duly
executed proxy bearing a later date. The proxy will not be voted if the
Shareholder is present at the Meeting and elects to vote in person. Attendance
at the Meeting alone will not serve to revoke the proxy.
In addition to the solicitation of proxies by mail, officers and
employees of the Trust, without additional compensation, may solicit proxies in
person or by telephone. The costs associated with such solicitation and the
Meeting will be borne by D.L. Babson and an affiliate of MassMutual and not by
the Fund or the Trust.
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The shares of the Fund may only be purchased by separate accounts
("Separate Accounts") established by State Mutual Life Assurance Company of
America ("State Mutual") or SMA Life Assurance Company ("SMA"), a subsidiary of
State Mutual, for the purpose of funding variable annuity contracts and variable
life insurance policies issued by State Mutual or SMA. The voting rights
accompanying ownership of shares of the Fund are legally vested only in the
Separate Accounts. As a matter of policy, however, variable life insurance
policy owners and variable annuity contract owners or participants
(collectively, "Contract Owners") of State Mutual or SMA have the right to
instruct the Separate Accounts on voting Fund shares on all matters on which
Fund Shareholders are entitled to vote. As of the close of business on May 10,
1995 there were 42,884,390 shares of the Fund outstanding.
The Trust's investment adviser is AIMCO, a wholly-owned subsidiary of
State Mutual. The address of AIMCO and State Mutual is 440 Lincoln Street,
Worcester, MA 01653. The Shareholder Services Group, Inc., d/b/a 440 Financial
Group, a wholly-owned subsidiary of First Data Corp., calculates net asset value
per share, maintains general accounting records and performs administrative
services for the Fund. Its address is 290 Donald Lynch Blvd., Marlboro, MA
01752.
The persons named in the accompanying proxy will vote in each case as
directed by the proxy, but in the absence of such voting directions, they intend
to vote FOR each proposal and may vote in their discretion with respect to other
matters not now known to the Board of Trustees that may be presented at the
Meeting.
All information contained in this Proxy Statement about D.L. Babson,
MassMutual, Buyer (as hereinafter defined) and the Stock Purchase Agreement (as
hereinafter defined) has been provided by D.L. Babson.
I. APPROVAL OR DISAPPROVAL OF NEW
SUB-ADVISER AGREEMENT BETWEEN
AIMCO AND D.L. BABSON
Background
General. The Meeting has been called for the purpose of considering a
new sub-adviser agreement for the Fund as a result of a proposed transaction
(the "Proposed Transaction") whereby DLB Acquisition Corporation ("Buyer"), an
affiliate of MassMutual, would acquire all of the capital stock of D.L. Babson,
the current investment sub-adviser of the Fund. Completion of the Proposed
Transaction will represent a change in the ownership of D.L. Babson, and as
such, will have the effect of terminating the Existing Sub-Adviser Agreement.
Accordingly, Shareholders are being asked to approve a "new" sub-adviser
agreement (the "New Sub-Adviser Agreement") embodying the same terms and fees
with the Sub-Adviser under its new ownership, differing only in the effective
and termination dates. The Trust's Board of Trustees has approved the New
Sub-Adviser Agreement, subject to approval by the Shareholders of the Fund, to
become effective on the consummation of the Proposed Transaction (the "Closing
Date").
<PAGE>
New Sub-Adviser Agreement.
Except for different effective and termination dates, the terms of the
New Sub-Adviser Agreement are identical to the terms of the Existing Sub-Adviser
Agreement. A form of the New Sub-Adviser Agreement is attached to this Proxy
Statement as Exhibit A, and the description set forth in this Proxy Statement of
the New Sub-Adviser Agreement is qualified in its entirety by reference to
Exhibit A.
Under the New Sub-Adviser Agreement, D.L. Babson will provide certain
investment advisory services to the Fund, including deciding what securities
will be purchased and sold by the Fund, when such purchases and sales are to be
made, and arranging for such purchases and sales, all in accordance with the
provisions of the Investment Company Act of 1940 (the "Investment Company Act")
and any rules thereunder, the governing documents of the Trust, the fundamental
policies of the Trust and Fund, as reflected in its registration statement, any
policies and determinations of the Board of Trustees of the Trust or of AIMCO
which are adopted in written form, and any applicable state or federal laws.
As compensation for its services to the Fund under the New Sub-Adviser
Agreement, D.L. Babson will be entitled to receive from AIMCO fees calculated at
the same rate as those charged under the Existing Sub-Adviser Agreement -- an
annual rate of .50% of the Fund's average daily net asset value. The New
Sub-Adviser Agreement will continue in effect until May 30, 1996, and will
continue in effect thereafter for successive annual periods, provided its
continuance is specifically approved at least annually by (1) a majority vote,
cast in person at a meeting called for that purpose, of the Trust's Board of
Trustees or (2) a vote of the holders of a majority (as defined in the
Investment Company Act and the rules thereunder) of the outstanding voting
securities of the Fund, and (3) in either event by a majority of the Trustees
who are not parties to the New Sub-Adviser Agreement or interested persons of
the Trust or of any such party. The New Sub-Adviser Agreement provides that it
may be terminated at any time, without penalty, by either party or by the
Trustees of the Trust upon 60 days written notice, provided that such
termination by the Trust shall be directed or approved by a vote of the Trustees
of the Trust, or by a vote of holders of a majority of the shares of the Fund.
D.L. Babson will provide, at its expense, all necessary investment and
management facilities, including salaries of personnel required for it to
faithfully execute its duties, and administrative facilities, including clerical
personnel and equipment necessary for it to conduct the investment advisory
affairs of the Fund efficiently (excluding pricing and bookkeeping services).
D.L. Babson is not obligated to pay any expenses for the Fund that are not
expressly assumed.
The New Sub-Adviser Agreement provides that D.L. Babson shall have no
liability to the Trust, to any Shareholders of the Trust, or AIMCO for any act
or omission in the course of or in connection with rendering services under the
New Sub-Adviser Agreement, except for liability resulting from willful
misfeasance, bad faith, gross negligence or reckless disregard on the part of
D.L. Babson of its duties under the New Sub-Adviser Agreement.
<PAGE>
The Transaction
Under a Stock Purchase Agreement dated as of May 4, 1995, (the
"Agreement") between Buyer, an indirect wholly-owned subsidiary of MassMutual,
and all of the stockholders (the "Sellers") of D.L. Babson, Buyer has agreed to
acquire all shares of D.L. Babson common stock (the "Transaction"). At the
closing of the Transaction (the "Closing"), the stockholders of D.L. Babson will
receive cash for their shares of D.L. Babson and D.L. Babson will become a
wholly-owned subsidiary of Buyer. D.L. Babson will continue to use its current
name after the Closing. Simultaneous with the Closing, certain officers and
employees of D.L. Babson will be granted shares of common stock in the Buyer
representing approximately 10% of the total outstanding common stock of Buyer.
In addition, the officers and employees of D.L. Babson will be eligible to
participate with the officers and employees of the Buyer and any of its other
subsidiaries in a stock option plan of Buyer relating to an additional 15% of
the common stock of Buyer.
Following the consummation of the Transaction, the operations of
MassMutual's Concert Capital Management, Inc. ("CCM") investment management
subsidiary are expected to be consolidated under the Buyer with the operations
of D.L. Babson. The combined operations will be conducted under the D.L. Babson
name. CCM was formed by MassMutual in 1993 to provide asset management services
to the institutional marketplace. Following the consummation of the Transaction,
D.L. Babson will have combined assets under management in excess of $10 billion.
MassMutual, 1295 State Street, Springfield, Massachusetts 01111-0001,
was established in 1851. MassMutual is a leading provider of individual life
insurance, annuities, employee group life, health, pension and investment
services. As the parent company of Oppenheimer Management Company, CCM, MML Bay
State Life Insurance Company and other affiliates, MassMutual has $65.7 billion
in assets under management. At December 31, 1994, MassMutual had total adjusted
capital of $2.5 billion, and for the fiscal year then ended recorded net gains
from operations of $229 million and dividends to policyholders of $524 million.
Pursuant to the terms of the Agreement, the purchase price to be paid
by the Buyer for the outstanding shares of D.L. Babson is $78.875 million,
subject to certain adjustments, based on, among other things, changes in
advisory revenues and working capital at the Closing.
The consummation of the Transaction is subject to prior satisfaction of
several conditions, including that D.L. Babson shall have obtained consents
from, or entered into new contracts with, clients representing advisory revenues
equal to not less than 70% of the advisory revenues of D.L. Babson as of
December 31, 1994.
Section 15(f) of the Investment Company Act provides that an investment
adviser of a registered investment company or an affiliated person may receive
any amount or benefit in connection with a sale of any interest in such
investment adviser which results in an assignment of an investment advisory
contract with such company, provided two conditions are satisfied. First, an
"unfair burden" must not be imposed on the investment company as a
<PAGE>
result of such sale or any express or implied terms, conditions or
understandings applicable thereto. The term "unfair burden" is defined to
include any arrangement during the two-year period after the sale whereby the
investment adviser (or predecessor or successor advisers), or any interested
person of any such adviser, receives or is entitled to receive any compensation,
directly or indirectly, (i) from any person in connection with the purchase or
sale of securities or other property to, from, or on behalf of such company,
other than bona fide ordinary compensation as principal underwriter for such
company, or (ii) from the investment company or its security holders (other than
fees for bona fide investment advisory or other services). No such arrangements
are in effect or contemplated insofar as the Fund is concerned. The Buyer and
D.L. Babson will use their best efforts to ensure that the Transaction will not
cause an "unfair burden" on the Fund. The second condition is that during the
three-year period immediately following consummation of the transaction, at
least 75% of the investment company's board of trustees must not be "interested
persons" of the investment adviser of such company or predecessor investment
adviser within the meaning of the Investment Company Act. D.L. Babson and the
Buyer believe that this condition is satisfied if at least 75% of the Fund's
trustees are not "interested persons" of D.L. Babson or the Buyer. At present,
none of the Fund's Trustees are "interested persons" of D.L. Babson or the
Buyer.
As required by the Investment Company Act, the Fund's Existing
Sub-Adviser Agreement provides for its automatic termination upon its
"assignment". The Investment Company Act defines assignment to include any
direct or indirect transfer of a controlling block of the assignor's outstanding
voting securities by a security holder of the assignor. Assuming the Transaction
is consummated, a transfer to the Buyer of the controlling block of D.L.
Babson's outstanding voting securities will occur, thus giving rise to an
"assignment" of the Fund's Existing Sub-Adviser Agreement and thus its
termination.
At the present time it is anticipated that the Closing of the
Transaction and, thus, the assignment, will occur in July, 1995. The precise
date at which any assignment of the Existing Sub-Adviser Agreement will occur,
if at all, cannot now be determined. The Agreement may be terminated prior to
the Closing under certain circumstances.
Information about the Sub-Adviser
D.L. Babson, a Massachusetts corporation with offices at One Memorial
Drive, Cambridge, MA 02142-1300, is owned by the Sellers (as defined above).
D.L. Babson is registered under the Investment Advisers Act of 1940 (the
"Advisers Act"). The New Sub-Adviser Agreement was approved by the Board of
Trustees of the Trust, including all of the non-interested Trustees, at a
meeting held for such purpose on May 9, 1995, and is now being submitted for
approval by the Shareholders of the Fund.
D.L. Babson's principal executive officers and directors are shown
below. The address of each, as it relates to his or her duties at D.L. Babson,
is the same as that of D.L. Babson. Each of the individuals named below will
hold the same position with D.L. Babson after the acquisition.
<PAGE>
PRINCIPAL EXECUTIVE OFFICERS
AND DIRECTORS OF D.L. BABSON
<TABLE>
<CAPTION>
Principal Occupation
Name and Address* (all positions are with D. L. Babson)
<S> <C>
David L. Babson Director and Consultant
H. Bradlee Perry Director
Peter C. Thompson President and Director
David G. Kirk Executive Vice President and Director; also, Vice
President, Babson Growth Fund, Babson Enterprise Fund,
Babson Enterprise Fund II, and Babson Value Fund.
Peter C. Schliemann Executive Vice President and Director; also, Vice
President, Babson Enterprise and Babson Enterprise
Fund II.
Edson B. Olds, IV Senior Vice President, Treasurer, Clerk and Director
Edward L. Martin Executive Vice President and Director; Vice President,
Babson Money Market Fund, Babson Tax-Free Income Fund
and Babson Bond Trust.
Roland W. Whitridge Senior Vice President and Director; also, Vice
President, Babson Value Fund and Shadow Stock Fund.
Kathleen M. Elliott Senior Vice President and Director
Each of David G. Kirk, H. Bradlee Perry, Peter C. Schliemann and Peter
C. Thompson owns more than 10% of the outstanding voting securities of D.L.
Babson.
- --------
* The address of the officers and directors of D.L. Babson is One Memorial
Drive, Cambridge, MA 02142.
</TABLE>
<PAGE>
Trustees' Consideration
The Board of Trustees believes that the terms of the New Sub-Adviser
Agreement are fair to, and in the best interest of, the Trust, the Fund, and its
Shareholders. The Board of Trustees, including all of the non-interested
Trustees, recommends approval by the Shareholders of the New Sub-Adviser
Agreement between D.L. Babson and AIMCO. In making this recommendation, the
Trustees considered principally the representation by MassMutual and D.L. Babson
that D.L. Babson will continue to operate with the same investment personnel and
officers, that the same persons who are presently responsible for the investment
policies of D.L. Babson will continue to direct the investment policies of D.L.
Babson following the acquisition and that no changes in D.L. Babson's method of
operation, or the location where it conducts its business, are contemplated. The
Trustees also considered: (1) that the compensation payable to D.L. Babson by
AIMCO under the proposed New Sub-Adviser Agreement will be at the same rate as
the compensation now payable by AIMCO to D.L. Babson under the Existing
Sub-Adviser Agreement; (2) that the terms of the Existing Sub-Adviser Agreement
will be unchanged under the New Sub-Adviser Agreement except for different
effective and termination dates; (3) the history, reputation, qualification and
background of D.L. Babson and MassMutual, as well as the qualifications of their
personnel and their respective financial conditions; (4) the commitment of D.L.
Babson to pay or reimburse the Fund for the expenses of the Fund incurred in
connection with the Proposed Transaction; (5) the benefits expected to be
realized as a result of D.L. Babson's affiliation with MassMutual; and (6) other
factors deemed relevant.
The Board of Trustees also considered the steps that the Buyer has
taken to assure the retention of key individuals by D. L. Babson. In particular,
the Board of Trustees considered that (a) certain officers and employees of D.
L. Babson will be granted shares of common stock in Buyer representing 10% of
the total outstanding common stock of Buyer, and that the rights to such shares
will vest over a five year period following the Closing (with vesting generally
contingent on the officer or employee continuing in the employment of D.L.
Babson), (b) the officers and employees of D. L. Babson will be eligible to
participate in a stock option plan relating to an additional 15% of the common
stock of Buyer, with vesting provisions similar to that of the common stock
referred to above, and (c) certain key officers, one of which is principally
responsible for managing the assets of the Fund, will be entering into three
year employment contracts with Buyer and D. L. Babson.
Accordingly, the Board of Trustees concluded that the Fund should
receive investment advisory services under the New Sub-Adviser Agreement equal
or superior to those they currently receive under the Existing Sub-Adviser
Agreement, at the same fee levels.
Recommendation and Required Vote
At the Meeting, the Shareholders of the Fund will vote on the proposed
New Sub-Adviser Agreement. The affirmative vote of the holders of a majority of
the outstanding shares of the Fund is required to approve this proposal.
"Majority" for this purpose under the Investment Company Act means the lesser of
(i) 67% of the shares represented at the meeting if more than 50% of such
outstanding shares are represented, or (ii) more than 50% of such outstanding
shares. Where a Shareholder abstains, the shares represented will be counted as
present and entitled to vote on the matter for purposes of determining a quorum,
but the abstention will have the effect of a negative vote on the proposal.
<PAGE>
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
OF THE FUND APPROVE THE NEW SUB-ADVISER AGREEMENT
II. APPROVAL OR DISAPPROVAL OF
EXISTING SUB-ADVISER AGREEMENT AND
RATIFICATION OF FEES PAID BY AIMCO TO
D.L. BABSON FROM APRIL 30, 1995
TO THE DATE OF THE MEETING
Shareholders are also being asked to reapprove the Existing Sub-Adviser
Agreement and to ratify the payment of fees by AIMCO to D.L. Babson from April
30, 1995 to the date of the Meeting pursuant to the Existing Sub-Adviser
Agreement.
Existing Sub-Adviser Agreement.
D.L. Babson currently serves as Sub-Adviser for the Fund under the
Existing Sub-Adviser Agreement between AIMCO and D.L. Babson. The Existing
Sub-Adviser Agreement was initially approved by the Shareholders of the Fund on
April 30, 1993 and provides that it will continue in effect until April 30, 1995
and will continue in effect thereafter for successive annual periods provided
its continuance is approved as required by the Investment Company Act. The Board
of Trustees, including all of the "non-interested" Trustees, most recently
approved continuation of the Existing Sub-Adviser Agreement on May 9, 1995. The
timing of such approval was consistent with the Board of Trustees' annual
consideration of the continuance of investment advisory agreements. Because this
approval was obtained nine days later than the expiration of the initial two
year period of the Agreement, there is some question as to its effectiveness.
Accordingly, the Shareholders are being asked to reapprove the Existing
Sub-Adviser Agreement and ratify the payment of fees during the period from
April 30, 1995 to the date of the Meeting. Under the Existing Sub-Adviser
Agreement, D.L. Babson is entitled to receive from AIMCO fees computed and paid
quarterly at the annual rate of .50% of the Fund's average daily net assets. For
the most recent fiscal year ending December 31, 1994, AIMCO paid D.L. Babson
$140,900 for its advisory services. At May 10, 1995 the net assets of the Fund
were approximately $49,734,327.
Recommendation and Required Vote
At the Meeting, the Shareholders of the Fund will vote on the Existing
Sub-Adviser Agreement and the ratification of the payment of fees by AIMCO to
D.L. Babson from April 30, 1995 to the date of the Meeting. The affirmative vote
of the holders of a majority of the outstanding shares of the Fund is required
to approve this proposal. "Majority" for this purpose under the Investment
Company Act means the lesser of (i) 67% of the shares represented at the meeting
if more than 50% of such outstanding shares are represented, or (ii) more than
50% of such outstanding shares. Where a Shareholder abstains, the shares
represented will be counted as present and entitled to vote on the matter for
purposes of determining a quorum, but the abstention will have the effect of a
negative vote on the proposal.
<PAGE>
THE BOARD OF TRUSTEES RECOMMENDS
THAT SHAREHOLDERS OF THE FUND APPROVE
THE EXISTING SUB-ADVISER AGREEMENT
AND RATIFY THE PAYMENT OF FEES BY AIMCO TO
D.L. BABSON FROM APRIL 30, 1995 TO THE DATE OF THE MEETING
Please refer to Exhibit B to this Proxy Statement, which identifies all
investment companies to which D.L. Babson serves as investment sub-adviser or
adviser, the fees charged by D.L. Babson, and the size of each such investment
company. Certain advisory agreements for investment companies to which D.L.
Babson is a party require or permit D.L. Babson to reduce or waive its fees
under certain circumstances.
GENERAL INFORMATION
Other Matters to Come Before the Meeting.
The Trust's management does not know of any matters to be presented at
the Meeting other than those described in this Proxy Statement. If other
business should properly come before the Meeting, the proxyholders will vote
thereon in accordance with their best judgment.
Portfolio Transactions
The Fund allocates to certain brokers a certain percentage of
commissions from transactions of the Fund. Brokerage firms whose customers
purchase variable annuity contracts or variable life insurance policies funded
by shares of the Fund may participate in brokerage commissions. Brokerage
transactions are not placed with any person affiliated with the Fund, AIMCO or
D.L. Babson, except as permitted by law.
Shareholder Proposals
The Meeting is a special meeting of Shareholders. The Trust and the
Fund are not required to, nor does either intend to, hold regular annual
meetings of its Shareholders. If such a meeting is called, any Shareholder who
wishes to submit a proposal for consideration at the meeting should submit the
proposal promptly to the Trust.
Reports to Shareholders
The Trust will furnish, without charge, a copy of the most recent Annual
Report to Shareholders of the Fund, and the most recent Semi-Annual Report
succeeding such Annual Report, if any, on request. Requests for such reports
should be directed to Allmerica Financial, 440 Lincoln Street, Worcester, MA
01653, telephone (800) 533-7881.
IN ORDER THAT THE PRESENCE OF A QUORUM AT THE MEETING MAY BE ASSURED,
PROMPT EXECUTION AND RETURN OF THE ENCLOSED PROXY IS REQUESTED. A
SELF-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
Richard M. Reilly
President
June 1, 1995
Worcester, MA
<PAGE>
EXHIBIT LIST
EXHIBIT A - Form of New Sub-Adviser Agreement
EXHIBIT B - List of Investment Companies for which D.L.
Babson serves as an Investment Adviser or
Sub-Adviser
<PAGE>
EXHIBIT A
SUB-ADVISER AGREEMENT
Sub-Adviser Agreement executed as of __________, 1995 between Allmerica
Investment Management Company, Inc. (the "Manager") and David L. Babson & Co.
Inc. (the "Sub-Adviser").
Witnesseth:
That in consideration of the mutual covenants herein contained, it is agreed as
follows:
1. SERVICES TO BE RENDERED BY SUB-ADVISER TO THE TRUST
(a) Subject always to the control of the Trustees of Allmerica
Investment Trust (the "Trust"), a Massachusetts business trust, the Sub-Adviser,
at its expense, will furnish continuously an investment program for the
following series of shares of the Trust: the Small Cap Value Fund and such other
series of shares as the Trust, the Manager and the Sub-Adviser may from time to
time agree on (together, the "Funds"). The Sub-Adviser will make investment
decisions on behalf of the Funds and place all orders for the purchase and sale
of portfolio securities. In the performance of its duties, the Sub-Adviser will
comply with the provisions of the Agreement and Declaration of Trust and Bylaws
of the Trust and the objectives and policies of the Funds, as set forth in the
current Registration Statement of the Trust filed with the Securities and
Exchange Commission ("SEC") and any applicable federal and state laws, and will
comply with other policies which the Trustees of the Trust (the "Trustees") or
the Manager, as the case may be, may from time to time determine and which are
furnished to the Sub-Adviser. The Sub-Adviser shall make its officers and
employees available to the Manager from time to time at reasonable times to
review investment policies of the Fund and to consult with the Manager regarding
the investment affairs of the Funds. In the performance of its duties hereunder,
the Sub-Adviser is and shall be an independent contractor and, unless otherwise
expressly provided or authorized, shall have no authority to act for or
represent the Trust in any way or otherwise be deemed to be an agent of the
Trust.
(b) The Sub-Adviser shall place all orders for the purchase and sale of
portfolio investments for the Fund with issuers, brokers or dealers selected by
the Sub-Adviser which may include brokers or dealers affiliated with the
Sub-Adviser. In the selection of such brokers or dealers and the placing of such
orders, the Sub-Adviser always shall seek best execution, (except to the extent
permitted by the next sentence hereof) which is to place portfolio transactions
where the Fund can obtain the most favorable combination of price and execution
services in particular transactions or provided on a continuing basis by a
broker or dealer, and to deal directly with a principal market maker in
connection with over-the-counter transactions, except when it is believed that
best execution is obtainable elsewhere. Subject to such policies as the Trustees
may determine, the Sub-Adviser shall not be deemed to have acted unlawfully or
to have breached any duty created by this Agreement or otherwise solely by
reason of its having caused the Trust to pay a broker or dealer that provides
brokerage and research services an amount of commission for effecting a
portfolio investment transaction in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction, if the
Sub-Adviser determines in good faith that such excess amount of commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer, viewed in terms of either that particular
<PAGE>
transaction or the overall responsibilities of the Sub-Adviser and its
affiliates with respect to the Trust and to other clients of the Sub-Adviser as
to which Sub-Adviser or any affiliate of the Sub-Adviser exercises investment
discretion.
2. OTHER AGREEMENTS
It is understood that any of the shareholders, Trustees, officers and employees
of the Trust may be a shareholder, partner, director, officer or employee of, or
be otherwise interested in, the Sub-Adviser, and in any person controlled by or
under common control with the Sub-Adviser, and that the Sub-Adviser and any
person controlled by or under common control with the Sub-Adviser may have an
interest in the Trust. It is also understood that the Sub-Adviser and persons
controlled by or under common control with the Sub-Adviser have and may have
advisory, management service or other contracts with other organizations and
persons, and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE MANAGER TO THE SUB-ADVISER
The Manager will pay to the Sub-Adviser as compensation for the Sub-Adviser's
services rendered a fee, determined as described in Schedule A which is attached
hereto and made a part hereof. Such fee shall be paid by the Manager and not by
the Trust.
4. AMENDMENTS OF THIS AGREEMENT
This Agreement (including Schedule A hereto) shall not be amended as to any Fund
unless such amendment is approved at a meeting by the affirmative vote of a
majority of the outstanding voting securities of the Fund, and by the vote, cast
in person at a meeting called for the purpose of voting on such approval, of a
majority of the Trustees who are not interested persons of the Trust, or of the
Manager or of the Sub-Adviser.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT
This Agreement shall be effective as of the date executed, and shall remain in
full force and effect as to each Fund continuously thereafter, until terminated
as provided below.
A. Unless terminated as herein provided, this Agreement shall remain in
full force and effect for two years from the date hereof, and shall continue in
full force and effect for successive periods of one year thereafter, but only so
long as such continuance is specifically approved at least annually (i) by the
Trustees or by the affirmative vote of a majority of the outstanding voting
securities of a Fund, and (ii) by a vote of a majority of the Trustees who are
not interested persons of the Trust or of the Manager or of any Sub-Adviser, by
vote cast in person at a meeting called for the purpose of voting on such
approval; provided, however, that if the continuance of this Agreement is
submitted to the shareholders of a Fund for their approval and such shareholders
fail to approve such continuance of this
<PAGE>
Agreement as provided herein, the Sub-Adviser may continue to serve hereunder as
the Sub-Adviser to such Funds in a manner consistent with the Investment Company
Act of 1940, as amended ("1940 Act") and the rules and regulations thereunder.
B. This Agreement may be terminated as to any Fund without the payment of
any penalty by the Manager, subject to the approval of the Trustees, by vote of
the Trustees, or by vote of a majority of the outstanding voting securities of
such Fund at any annual or special meeting or by the Sub-Adviser on sixty days'
written notice.
C. This Agreement shall terminate automatically, without the payment of any
penalty, in the event of its assignment or in the event that the Management
Agreement shall have terminated for any reason.
6. CERTAIN DEFINITIONS
For the purposes of this Agreement, the "affirmative vote of a majority of the
outstanding voting securities" means the affirmative vote, at a duly called and
held meeting of shareholders, (a) of the holders of 67% or more of the shares of
a Fund present (in person or by proxy) and entitled to vote at such meeting, if
the holders of more than 50% of the outstanding shares of the Fund entitled to
vote at such meeting are present in person or by proxy, or (b) of the holders of
more than 50% of the outstanding shares of the Fund entitled to vote at such
meeting, whichever is less.
For the purposes of this Agreement, the terms "control", "interested person" and
"assignment" shall have their respective meanings defined in the 1940 Act and
rules and regulations thereunder, subject, however, to such exemptions as may be
granted by the SEC under said Act; the term "specifically approve at least
annually" shall be construed in a manner consistent with the 1940 Act and the
rules and regulations thereunder; and the term "brokerage and research services"
shall have the meaning given in the Securities Exchange Act of 1934 and the
rules and regulations thereunder.
7. NONLIABILITY OF SUB-ADVISER
The Sub-Adviser shall be under no liability to the Trust, the Manager or the
Trust's Shareholders or creditors for any matter or thing in connection with the
performance of any of the Sub-Adviser's services hereunder or for any losses
sustained or that may be sustained in the purchase, sale or retention of any
investment for the Funds of the Trust made by it in good faith; provided,
however, that nothing herein contained shall be construed to protect the
Sub-Adviser against any liability to the Trust by reason of the Sub-Adviser's
own willful misfeasance, bad faith, or gross negligence in the performance of
its duties or by reason of its reckless disregard of its obligations and duties
hereunder.
8. LIMITATIONS OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS
A copy of the Trusts' Agreement and Declaration of Trust is on file with the
Secretary of the Commonwealth of Massachusetts, and notice is hereby given that
this instrument is executed by the
<PAGE>
Trustees as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees, officers or shareholders
individually but are binding only upon the assets and property of the
appropriate Fund.
IN WITNESS WHEREOF, ALLMERICA INVESTMENT MANAGEMENT COMPANY, INC. has
caused this instrument to be signed in duplicate on its behalf by its duly
authorized representative and David L. Babson & Co. Inc. has caused this
instrument to be signed in duplicate on its behalf by its duly authorized
representative, all as of the day and year first above written.
ALLMERICA INVESTMENT MANAGEMENT COMPANY, INC.
By: ________________________
DAVID L. BABSON & CO. INC.
By: ________________________
Accepted and Agreed to as of the day and year first above written:
ALLMERICA INVESTMENT TRUST
By: _________________________
<PAGE>
SCHEDULE A
The Manager will pay to the Sub-Adviser as full compensation for the
Sub-Adviser's services rendered, a fee, computed and paid quarterly at an annual
rate of .50% of the average daily net assets of the Fund. The fee for each
quarter shall be payable within ten (10) business days after the end of the
quarter.
The average daily net assets of the Fund shall be determined by taking an
average of all of the determinations of net asset value during each month at the
close of business on each business day during such month while this Agreement is
in effect.
If the Sub-Adviser shall serve for any period less than a full month, the
foregoing compensation shall be prorated according to the proportion which such
period bears to a full month.
<PAGE>
EXHIBIT B
OTHER MUTUAL FUNDS MANAGED BY D.L. BABSON
<TABLE>
<CAPTION>
NET ASSETS (MIL.)
BABSON FUNDS 4/30/95 INVESTMENT COUNSEL FEE INVESTMENT COUNSEL
<S> <C> <C> <C>
D.L. Babson Money Market
Fund, Inc. - Prime Portfolio 40,862,714 0.20% David L. Babson & Co.
D.L. Babson Money Market
Fund, Inc. - Federal Portfolio 9,709,157 0.20% David L. Babson & Co.
D.L. Babson Tax-Free Income
Fund, Inc. - Money Market 12,737,769 0.10% David L. Babson & Co.
D.L. Babson Tax-Free Income
Fund, Inc., - Long Portfolio 27,748,107 0.25% David L. Babson & Co.
D.L. Babson Tax-Free Income
Fund, Inc. - Short Portfolio 27,991,590 0.25% David L. Babson & Co.
David L. Babson Growth Fund, Inc. 237,743,116 0.30% David L. Babson & Co.
0.25%
(100-250 mil. in assets)
0.20%
(>250 mil. in assets)
Babson Enterprise Fund, Inc. 199,992,507 0.70% David L. Babson & Co.
0.50%
(>30 mil. in assets)
Babson Enterprise Fund II, Inc. 37,923,487 0.70% David L. Babson & Co.
0.50%
(>30 mil. in assets)
Babson Value Fund, Inc. 184,709,968 0.35% David L. Babson & Co.
D.L. Babson Bond Trust - Portfolio L 148,220,909 0.25% David L. Babson & Co.
D.L. Babson Bond Trust - Portfolio S 29,733,960 0.25% David L. Babson & Co.
Shadow Stock Fund, Inc. 39,344,580 0.25% David L. Babson & Co. and
0.20% Analytic Systems, Inc.**
Babson-Stewart Ivory International
Fund, Inc. 65,282,884 0.475% Babson-Stewart Ivory
International***
**Shadow Stock Fund has investment counsel agreements with each of D.L.
Babson and Analytic Systems, Inc., which are independently owned and operated
firms, with no corporate affiliation.
***Babson-Stewart Ivory International is a partnership formed in 1987 by
D.L. Babson and Stewart Ivory & Company (International) Ltd.
</TABLE>
<PAGE>
OTHER MUTUAL FUNDS MANAGED BY D.L. BABSON
<TABLE>
<CAPTION>
NET ASSETS INVESTMENT INVESTMENT
MUTUAL FUNDS 4/30/95 COUNSEL FEE COUNSEL
<S> <C> <C> <C>
Touchstone Emerging Growth Portfolio 1,463,463 0.50% David L. Babson & Co.
Touchstone Select Advisors Variable Insurance Trust 1,048,930 0.50% David L. Babson & Co.
The Valiant Fund General Money Market Portfolio 385,537,569 See Note David L. Babson & Co.
The Valiant Fund Government Money Market Portfolio 0 See Note David L. Babson & Co.
The Valiant Fund Treasury Money Market Portfolio 97,277,112 See Note David L. Babson & Co.
The Valiant Fund Tax Exempt Money Market Portfolio 263,812,979 See Note David L. Babson & Co.
Total for the Valiant Fund 746,627,660 0.10% on first
$500,000,000
0.05% on amount over
$5000,000,000
Note - Fee computed on average daily
assets of total of all funds
Allmerica Investment Trust Small Cap Value Fund 51,497,184 0.50% David L. Babson & Co.
</TABLE>
<PAGE>
SMALL CAP VALUE FUND
(A SERIES OF ALLMERICA INVESTMENT TRUST)
THIS SOLICITATION IS BEING MADE ON
BEHALF OF THE BOARD OF TRUSTEES.
The undersigned contract owner by completing this form does thereby
appoint Richard M. Reilly, Eric S. Levy, Robert T. Stemple, and Susan C. Mosher
or any of them with full power of substitution, as attorneys and proxies of the
undersigned, and does thereby request that the votes attributable to the
undersigned's interest be cast as directed at the Meeting of Shareholders of the
Small Cap Value Fund, a series of Allmerica Investment Trust, to be held at
10:00 a.m. on June 27, 1995 at the offices of Allmerica Investment Management
Company, Inc., 440 Lincoln Street, Worcester, Massachusetts, and at any
adjournment thereof.
TOTAL VOTES (EQUIVALENT SHARES) AS SHOWN BELOW
PLEASE VOTE, DATE, SIGN EXACTLY AS YOUR NAME APPEARS BELOW, AND RETURN THIS
FORM IN THE ENCLOSED SELF-ADDRESSED ENVELOPE.
NOTE: The undersigned hereby acknowledges receipt of the Notice of Meeting
and Proxy Statement, and revokes any proxy heretofore given with respect to the
votes covered by this proxy.
Dated_______________________________________, 1995
_______________________________________
(Signature)
THE INTERESTS REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED
BELOW, OR IF NO DIRECTION IS INDICATED, WILL BE VOTED FOR THE PROPOSALS BELOW.
IF A PROXY IS NOT RECEIVED FROM A PARTICULAR CONTRACT OWNER, THEN THE VOTES
ATTRIBUTABLE TO HIS OR HER INTEREST WILL BE ALLOCATED IN THE SAME RATIO AS VOTES
FOR WHICH INSTRUCTIONS HAVE BEEN RECEIVED.
Please vote by checking your response.
(1) Approval of new Sub-Adviser Agreement between Allmerica
Investment Management Company, Inc. ("AIMCO") and David L. Babson and
Company Incorporated ("D.L. Babson").
FOR AGAINST ABSTAIN
(2) Approval of existing Sub-Adviser Agreement between AIMCO and
D.L. Babson dated April 30, 1993 and ratification of payment of fees
by AIMCO to D.L. Babson from April 30, 1995 to the date of the Meeting.
FOR AGAINST ABSTAIN
<PAGE>
June 1, 1995
Dear Valued Client,
The enclosed proxy material describes a proposed transaction involving the
purchase of the capital stock of David L. Babson and Company Incorporated
("David L. Babson"), the sub-adviser to the Small Cap Value Fund. The purchaser
is a subsidiary of MassMutual.
David L. Babson will become a wholly-owned subsidiary of the buyer and will
continue to use its name after the closing. Key officers and employees of David
L. Babson will receive shares of common stock in the buyer. In addition, the
operations of an institutional investment management subsidiary of the buyer
will be consolidated with those of David L. Babson. The combined operation will
be conducted by David L. Babson from its current location.
Because the change in David L. Babson's ownership amounts to a transfer of
control under the provisions of the Investment Company Act of 1940, the
shareholders of the Small Cap Value Fund must approve a new contract between
Allmerica Investment Management Company, Inc. and David L. Babson in order for
David L. Babson to continue to manage the Fund.
The Trustees are satisfied that the provisions of the transaction, including the
employment contracts entered into with key personnel of David L. Babson,
particularly those most responsible for the operations of the Fund, should not
result in any significant changes in the day-to-day management of the Fund by
David L. Babson. In addition, the consolidation of investment operations should
strengthen David L. Babson. Consequently, the Trustees are proposing a new
sub-advisory agreement with David L. Babson. The substantive terms of this new
sub-advisory agreement are identical to those of the existing agreement. The
Trustees recommend that you vote to approve this new contract.
You are also being asked to reapprove the existing Sub-Adviser
Agreement and to ratify the payment of fees by Allmerica Investment Management
Company, Inc. to David L. Babson from April 30, 1995 to the date of the Meeting
pursuant to the existing Sub-Adviser Agreement. The existing Sub-Adviser
Agreement was initially approved by the Shareholders of the Fund on April 30,
1993 and provides that it will continue in effect until April 30, 1995 and will
continue in effect thereafter for successive annual periods provided its
continuance is approved as required by the Investment Company Act of 1940. The
Board of Trustees, including all of the "non-interested" Trustees, most recently
approved continuation of the existing Sub-Adviser Agreement on May 9, 1995. The
timing of such approval was consistent with the Board of Trustees' annual
consideration of the continuance of investment advisory agreements. Because this
approval was obtained nine days later than the expiration of the initial two
year period of the Agreement, there is some question as to its effectiveness.
Accordingly, the Shareholders are being asked to reapprove the existing
Sub-Adviser Agreement and ratify the payment of fees during the period from
April 30, 1995 to the date of the Meeting.
Enclosed you will find the proxy statement which details the transaction
and t g sub-adviser contract you are being asked to approve. We encourage you to
be sure to return your proxy voting card in the postage-paid envelope provided.
If your proxy is not received, the votes attributable to you interest will be
voted in the same ratio as votes for which instructions have been received.
Should you have any questions, please call your Investment Representative
or our Customer Service Representative at (800) 533-7881, between 9 a.m. and 5
p.m. Eastern Daylight Time. We look forward to continuing to meet your
investment needs.
Sincerely,
Richard M. Reilly
President
Allmerica Investment Trust
