ALLMERICA INVESTMENT TRUST, 485APOS, 1999-02-25

ALLMERICA INVESTMENT TRUST
485APOS, 1999-02-25

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<PAGE>

As filed with the Securities and Exchange Commission on February 25, 1999
File Nos. 811-4138 and 2-94067

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. ____ [_]
Post-Effective Amendment No. 37 [X]
----

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [_]

Amendment No. 38 [X]
----

ALLMERICA INVESTMENT TRUST
--------------------------
(Name of Registrant)

440 Lincoln Street
WORCESTER, MASSACHUSETTS 01653
(Address of Principal Executive Offices)

Registrant's Telephone Number, including Area Code:
(508) 855-1000

(Names and Addresses of Agents for Service:)

George M. Boyd, Esq. Gregory D. Sheehan, Esq.
Allmerica Financial Ropes & Gray
440 Lincoln Street One International Place
Worcester, MA 01653 Boston, Massachusetts 02110

Approximate Date of Proposed Public Offering as soon after filing as
-----------------------
practicable
- -----------

It is proposed that this filing will become effective:

____ immediately upon filing pursuant to paragraph (b)

____ on (date) pursuant to paragraph (b)

____ 60 days after filing pursuant to paragraph (a)(1)

X on May 1, 1999 pursuant to paragraph (a)(1)
- ----

____ 75 days after filing pursuant to paragraph (a)(2)

____ on (date) pursuant to paragraph (a)(2) of rule 485.

If appropriate, check the following box:

____ This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

<PAGE>

ALLMERICA INVESTMENT TRUST
Cross-Reference Sheet

Item No. of Form N-1A Prospectus Caption
- --------------------- ------------------

1................... Prospectus Front and Back Cover Pages

2(a)................ Fund Summaries: Objectives, Strategies and Risks

2(b)................ Fund Summaries: Objectives, Strategies and Risks,
Other Investment Strategies

2(c)................ Fund Summaries: Objectives, Strategies and Risks,
Description of Principal Investment Risks

3................... Expense Summary

4(a) and (b)........ Fund Summaries: Objectives, Strategies and Risks,
Other Investment Strategies

4(c)................ Fund Summaries: Objectives, Strategies and Risks,
Description of Principal Investment Risks

5................... Not Applicable

6(a)................ Fund Summaries: Objectives, Strategies and Risks,
Management of the Funds

6(b)................ Not Applicable

7(a)................ Pricing of Fund Shares

7(b) and (c)........ Purchase and Redemption of Shares

7(d) and (e)........ Distributions and Taxes

7(f)................ Not Applicable

8................... Not Applicable

9................... Financial Highlights

Caption in Statement of Additional Information
----------------------------------------------

10(a)............... Cover Page

10(b)............... Table of Contents

2
<PAGE>

Item No. of Form N-1A Caption in Statement of Additional Information
--------------------- ----------------------------------------------

11(a)................. Trust History

11(b)................. Not Applicable

12(a)................. Trust History

12(b)-(d)............. Description of the Funds and Their Investments and
Risks: Additional Information about the Funds,
Investment Restrictions and Policies, and
Investment Strategies and Techniques

12(e)................. Description of the Funds and Their Investments and
Risks: Portfolio Turnover

13(a)-(d)............. Management of the Trust

13(e)................. Not Applicable

14.................... Control Person and Principal Holders of Securities

15(a)-(d)............. Investment Management and Other Services

15(e)-(h)............. Not Applicable

16(a)-(d)............. Brokerage Allocation and Other Services

16(e)................. Not Applicable

17(a)................. Capital Stock and Other Securities

17(b)................. Not Applicable

18(a)................. Purchase, Redemption, and Pricing of Securities
Being Offered

18(b)................. Not Applicable

18(c)................. Purchase, Redemption, and Pricing of Securities
Being Offered

18(d)................. Not Applicable

19(a)................. Taxation of the Funds of the Trust

19(b)................. Not Applicable

3
<PAGE>

Item No. of Form N-1A Caption in Statement of Additional Information
--------------------- ----------------------------------------------

20(a)................. Underwriters

20(b) and (c)......... Not Applicable

21.................... Calculation of Performance Data

22.................... Financial Statements

4
<PAGE>

ALLMERICA INVESTMENT TRUST

PROSPECTUS DATED: MAY 1, 1999

This Prospectus describes the following 10 investment Funds of the Trust which
serve as the underlying investments for insurance related accounts.

SELECT EMERGING MARKETS FUND
SELECT AGGRESSIVE GROWTH FUND
SELECT CAPITAL APPRECIATION FUND
SELECT VALUE OPPORTUNITY FUND
SELECT INTERNATIONAL EQUITY FUND
SELECT GROWTH FUND
SELECT STRATEGIC GROWTH FUND
SELECT GROWTH AND INCOME FUND
SELECT INCOME FUND
MONEY MARKET FUND

This Prospectus explains what you should know about each of the Funds before you
invest. Please read it carefully before you invest.

A particular Fund may not be available under the variable annuity or variable
life insurance policy which you have chosen. The Prospectus of the specific
insurance product you have chosen will indicate which Funds are available and
should be read in conjunction with this Prospectus. Inclusion in this
Prospectus of a Fund which is not available under your policy is not to be
considered a solicitation.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED THAT
THIS PROSPECTUS IS ADEQUATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.

440 LINCOLN STREET
WORCESTER, MASSACHUSETTS 01653
(508) 855-1000
<PAGE>

TABLE OF CONTENTS

<TABLE>
<S> <C>
FUND SUMMARIES......................................................................... 3
Objectives, Strategies and Risks...................................................... 3
Select Emerging Markets Fund......................................................... 3
Select Aggressive Growth Fund........................................................ 4
Select Capital Appreciation Fund..................................................... 5
Select Value Opportunity Fund........................................................ 7
Select International Equity Fund..................................................... 8
Select Growth Fund................................................................... 9
Select Strategic Growth Fund......................................................... 11
Select Growth and Income Fund........................................................ 11
Select Income Fund................................................................... 13
Money Market Fund.................................................................... 14

EXPENSE SUMMARY........................................................................ 16

DESCRIPTION OF PRINCIPAL INVESTMENT RISKS.............................................. 18

OTHER INVESTMENT STRATEGIES............................................................ 21

MANAGEMENT OF THE FUNDS................................................................ 23

PRICING OF FUND SHARES................................................................. 29

PURCHASE AND REDEMPTION OF SHARES...................................................... 29

DISTRIBUTIONS AND TAXES................................................................ 30

YEAR 2000.............................................................................. 31

FINANCIAL HIGHLIGHTS................................................................... 31
</TABLE>

2
<PAGE>

FUND SUMMARIES

Allmerica Investment Trust provides a broad range of investment options through
10 separate investment portfolios, or Funds. Shares of the Funds are sold
exclusively to variable annuity and variable life insurance Separate Accounts
and qualified pension and retirement plans.

The investment manager of the Trust is Allmerica Financial Investment Management
Services, Inc. The Manager is responsible for managing the Trust's daily
business and has general responsibility for the management of the investments of
the Funds. The Manager, at its expense, has contracted with investment Sub-
Advisers to manage the investments of the Funds. Each Sub-Adviser has been
selected on the basis of various factors including management experience,
investment techniques and staffing. See "Management of the Funds" for more
information about the Manager and the Sub-Advisers.

The following summaries describe each Fund's investment objective and principal
investment strategies, identify the principal investment risks of investing in
the Fund, and provides performance charts for the Fund. Note that any
percentage limitations listed under a Fund's principal investment strategies
apply at the time of investment. The principal risks are discussed in more
detail under "Description of Principal Investment Risks". The bar charts show
how the investment returns of the shares of a Fund have varied in the past ten
years (or for the life of the Fund if less than 10 years). The table following
each bar chart shows how the Fund's average annual return for the last one, five
and ten years (or for the life of the Fund, if shorter) compares to those of a
broad-based securities market index. PAST PERFORMANCE DOES NOT NECESSARILY
INDICATE HOW THE FUND WILL PERFORM IN THE FUTURE. The bar charts and tables
give some indication of the risks of investing in each Fund by showing changes
in the Fund's performance. A bar chart and table are not included for two new
Funds, the Select Emerging Markets Fund and the Select Strategic Growth Fund,
since as of December 31, 1998 they had not yet had a full calendar year of
investment returns.

OBJECTIVES, STRATEGIES AND RISKS
- --------------------------------

SELECT EMERGING MARKETS FUND

Sub-Adviser: Schroder Capital Management International Inc.

Investment Objective: The Fund seeks long-term growth of capital by investing
in the world's emerging markets.

3
<PAGE>

emerging markets. The Fund usually has investments in at least five developing
countries. Before the Fund invests in a country, the Sub-Adviser considers
various factors such as that country's political stability and economic
prospects. In selecting securities for the Fund, the Sub-Adviser focuses on the
long-term growth potential of the securities.

The Fund invests primarily in equities, including common stock, preferred stock,
securities convertible into common stock, rights and warrants and similar
securities. The Fund also may invest up to 35% of its assets in debt securities
of issuers in emerging markets, equity and debt securities of issuers in
developed countries, cash and cash equivalents. The Fund may invest in lower
rated bonds, commonly known as "junk bonds", as further discussed in the
"Description of Investment Risks."

Principal Risks:

. Company Risk
. Credit Risk
. Currency Risk
. Derivatives Risk
. Emerging Markets Risk
. Foreign Investment Risk
. Investment Management Risk
. Liquidity Risk
. Market Risk

SELECT AGGRESSIVE GROWTH FUND
Sub-Adviser: Nicholas-Applegate Capital Management, L.P.

Investment Objective: The Fund seeks above-average capital appreciation by
investing primarily in common stocks of companies which are believed to have
significant potential for capital appreciation.

Principal Investment Strategies: To pursue this goal, the Fund looks
predominantly for stocks of small and mid-size companies that show potential for
rapid growth. The Fund typically invests in companies that, because of positive
developments affecting the company, offer the possibility of accelerating
earnings. The Sub-Adviser uses systematic, fundamental research in selecting
investments for the Fund.

Under normal circumstances, the Fund invests at least 65% of its assets in
common stocks, securities convertible into common stocks and warrants. The Fund
also may invest in debt securities and preferred stocks and up to 25% of its
assets in foreign securities (not including its investments in American
Depositary Receipts or "ADRs").

4
<PAGE>

Principal Risks:

. Company Risk
. Derivatives Risk
. Investment Management Risk
. Liquidity Risk
. Market Risk

YEARLY PERFORMANCE

[BAR CHART APPEARS HERE]

<TABLE>
<S> <C>
1993 19.51%

1994 -2.31%

1995 32.28%

1996 18.55%

1997 18.71%

1998 10.56%
</TABLE>

During the period shown above the highest quarterly return was 30.61% for the
quarter ended 06/30/97 and the lowest was (24.40)% for the quarter ended
08/31/98.

PERFORMANCE TABLE

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Average Annual Total Returns (for the Past Past Life
periods ending December 31, 1998) One Year 5 Years Of Fund
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fund Shares 10.56% 14.99% 18.11%
- --------------------------------------------------------------------------------------------
Russell 2500 Index* 0.38% 14.13% 16.27%
- --------------------------------------------------------------------------------------------
</TABLE>

* The Russell 2500 Index is an unmanaged composite of 2,500 small-to-mid
capitalization stocks.

SELECT CAPITAL APPRECIATION FUND
Sub-Adviser: T. Rowe Price Associates, Inc.

Investment Objective: The Fund seeks long-term growth of capital. Realization
of income is not a significant investment consideration and any income realized
on the Fund's investments will be incidental to its primary objective.

5
<PAGE>

Principal Investment Strategies: The Fund's Sub-Adviser looks for companies
with proven business ideas and earnings growth rates in excess of market
averages. The Fund normally invests at least 50% of its equity assets in
securities of companies with market capitalizations that fall within the range
of companies in the S&P Mid Cap 400 Index (as of December 31, 1998, $240 million
to $11.6 billion market capitalization). The Fund may also invest in larger
firms and firms with a market capitalization below $240 million.

While the Fund invests primarily in common stocks, it also may invest in
preferred stocks, warrants, government securities, corporate bonds and other
debt securities. Up to 25% of its assets may be invested in "junk bonds". The
Fund may invest without limitation in foreign securities.

Principal Risks:

. Company Risk
. Credit Risk
. Currency Risk
. Derivatives Risk
. Foreign Investment Risk
. Investment Management Risk
. Liquidity Risk
. Market Risk

YEARLY PERFORMANCE

[BAR CHART APPEARS HERE]

<TABLE>
<S> <C>
1996 8.80%

1997 14.28%

1998 13.88%
</TABLE>

During the period shown above the highest quarterly return was 27.90% for the
quarter ended 12/31/98 and the lowest was (19.81)% for the quarter ended
08/31/98.

T. Rowe Price Associates, Inc. became Sub-Adviser of the Fund on April 1, 1998.
Performance before that date is based on the performance of the Fund's previous
Sub-Adviser.

6
<PAGE>

PERFORMANCE TABLE

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
Average Annual Total
Returns (for the periods Past Life
ending December 31, 1998) One Year of Fund
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Fund Shares 13.88% 20.37%
- ----------------------------------------------------------------------------------------------
Russell 2500 Index* 0.38% 17.50%
- ----------------------------------------------------------------------------------------------
</TABLE>

* The Russell 2500 Index is a unmanaged composite of 2,500 small-to-mid
capitalization stocks.

SELECT VALUE OPPORTUNITY FUND
Sub-Adviser: Cramer Rosenthal McGlynn, LLC

Investment Objective: The Fund seeks long-term growth of capital by investing
primarily in a diversified portfolio of common stocks of small and mid-size
companies, whose securities at the time of purchase are considered by the Sub-
Adviser to be undervalued.

Principal Investment Strategies: The Fund's Sub-Adviser attempts to find stocks
that are attractively valued relative to their future prospects and the market
as a whole. The most promising opportunities can be found in companies that are
temporarily out of favor or when most analysts are confused about changes taking
place at a company. In these situations, the company's stock is often
undervalued.

The Fund invests primarily in companies with market capitalization between $200
million and $5 billion. The Fund normally invests at least 80% of the portfolio
in common stocks and may invest up to 25% of its assets in foreign securities
(not including its investments in ADRs).

Principal Risks:

. Company Risk
. Currency Risk
. Derivatives Risk
. Foreign Investment Risk
. Investment Management Risk
. Liquidity Risk
. Market Risk

7
<PAGE>

YEARLY PERFORMANCE

[BAR CHART APPEARS HERE]

<TABLE>
<S> <C>
1994 -6.51%

1995 17.60%

1996 28.53%

1997 24.85%

1998 4.87%
</TABLE>

During the period shown above the highest quarterly return was 19.73% for the
quarter ended 07/31/97 and the lowest was (20.23)% for the quarter ended
08/31/98. Absent reimbursement of certain Fund expenses during these periods,
the Fund total returns would have been lower.

Cramer Rosenthal McGlynn, LLC became Sub-Adviser of the Fund on January 1, 1997.
Performance before that date is based on the performance of the Fund's previous
Sub-Adviser.

PERFORMANCE TABLE

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Average Annual Total Returns (for Past Past Life
the periods ending December 31, 1998) One Year 5 Years Of Fund
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fund Shares 4.87% 13.09% 14.71%
- -------------------------------------------------------------------------------------------------------------------
Russell 2500 Index* 0.38% 14.13% 15.09%
- -------------------------------------------------------------------------------------------------------------------
</TABLE>

* The Russell 2500 Index is an unmanaged composite of 2,500 small-to-mid
capitalization stocks.

SELECT INTERNATIONAL EQUITY FUND
Sub-Adviser: Bank of Ireland Asset Management (U.S.) Limited

Investment Objective: The Fund seeks maximum long-term total return (capital
appreciation and income) primarily by investing in common stocks of established
non-U.S. companies.

Principal Investment Strategies: Under normal market conditions, at least 65%
of the Fund's assets will be invested in the securities of medium and large-size
companies located in at least five foreign countries, not including the United
States. To achieve its objective, the Fund focuses on stocks which the Sub-
Adviser believes are undervalued in relation to the company's prospects for
future earnings growth. The Fund may also buy fixed-income debt securities,
primarily for defensive purposes.

8
<PAGE>

Principal Risks:

. Company Risk
. Currency Risk
. Derivatives Risk
. Foreign Investment Risk
. Investment Management Risk
. Market Risk

YEARLY PERFORMANCE

[BAR CHART APPEARS HERE]

<TABLE>
<S> <C>
1995 19.63%

1996 21.94%

1997 4.65%

1998 16.48%
</TABLE>

During the period shown above the highest quarterly return was 19.49% for the
quarter ended 12/31/98 and the lowest was (17.69)% for the quarter ended
09/30/98.

PERFORMANCE TABLE

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Average Annual Total Returns (for the Past Life
periods ending December 31, 1998) One Year Of Fund
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Fund Shares 16.48% 12.26%
- -----------------------------------------------------------------------------------------------
Morgan Stanley Capital International 20.33% 8.41%
EAFE Index*
- -----------------------------------------------------------------------------------------------
</TABLE>

* The Morgan Stanley Capital International EAFE (Europe, Australia, Far East)
Index, reflecting reinvestment of gross dividends, is an unmanaged
capitalization weighted index of foreign developed country common stocks.

SELECT GROWTH FUND
Sub-Adviser: Putnam Investment Management, Inc.

Investment Objective: The Fund seeks to achieve long-term growth of capital by
investing in a diversified portfolio consisting primarily of common stocks
selected on the basis of their long-term growth potential.

9
<PAGE>

Principal Investment Strategies: To attain its objective, the Fund looks for
companies that appear to have favorable long-term growth characteristics. The
Fund typically invests in stocks of large capitalization companies, such as
those included in the S&P 500 Index, although it can also make investments in
smaller growth companies.

At least 65% of the Fund's assets normally will consist of common stocks that
the Sub-Adviser believes have growth potential. The Fund also may purchase
convertible bonds and preferred stocks and warrants. The Fund normally invests
substantially all of its investments in equity securities, although it may
invest up to 35% in debt securities including up to 15% in "junk bonds". The
Fund may invest up to 25% of its assets in foreign securities (not including its
investments in ADRs).

Principal Risks:

. Company Risk
. Credit Risk
. Derivatives Risk
. Investment Management Risk
. Market Risk

YEARLY PERFORMANCE

[BAR CHART APPEARS HERE]

<TABLE>
<S> <C>
1993 0.84%

1994 -1.49%

1995 24.59%

1996 22.02%

1997 34.06%

1998 35.44%
</TABLE>

During the period shown above the highest quarterly return was 25.02% for the
quarter ended 12/31/98 and the lowest was (11.84)% for the quarter ended
09/30/98.

Putnam Investment Management, Inc. became Sub-Adviser of the Fund on July 1,
1996. Performance before that date is based on the performance of the Fund's
previous Sub-Adviser.

10
<PAGE>

PERFORMANCE TABLE

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Average Annual Total
Returns (for the periods Past Past Life
ending December 31, 1998) One Year 5 Years Of Fund
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fund Shares 35.44% 22.15% 19.18%
- -------------------------------------------------------------------------------------------------
S&P 500 Index* 28.58% 24.06% 21.53%
- -------------------------------------------------------------------------------------------------
</TABLE>

* The S&P 500(R) Index, reflecting reinvestment of dividends, is an unmanaged
index of 500 leading stocks. S&P 500(R) Index is a registered trademark of
Standard & Poor's Corporation.

SELECT STRATEGIC GROWTH FUND
- ----------------------------
Sub-Adviser: Cambiar Investors, Inc.

Investment Objective: The Fund seeks long-term growth of capital by investing
primarily in common stocks of established companies.

Principal Investment Strategies: The Sub-Adviser attempts to find stocks that
are currently trading at attractive values in relation to the market and have
potential for long-term earnings growth. These are often stocks of companies
which have been out of favor but have experienced positive recent developments
not yet recognized in the stock's price.

Under normal market conditions, the Fund invests at least 65% of its assets in
the common stocks of companies with a market capitalization of more than $1
billion. In addition, the Fund may purchase preferred stocks, debt securities
and securities convertible into or exchangeable for common stocks. The Fund may
invest up to 20% of its assets in foreign securities (not including its
investments in ADRs).

Principal Risks:

. Company Risk
. Derivatives Risk
. Investment Management Risk
. Market Risk

SELECT GROWTH AND INCOME FUND
Sub-Adviser: J.P. Morgan Investment Management Inc.

Investment Objective: The Fund seeks a combination of long-term growth of
capital and current income. The Fund will invest primarily in dividend-paying
common stocks and securities convertible into common stocks.

11
<PAGE>

Principal Investment Strategies: The Fund invests in a broadly diversified
portfolio of equity securities, primarily the common stock of companies
included in the S&P 500 Index. The Fund's industry diversification and other
risk characteristics will be similar to those of the index. The Fund may invest
in a wide range of equity securities, consisting of common stocks, preferred
stocks, securities convertible into common and preferred stocks and warrants.
The Fund may purchase individual stocks not presently paying dividends if the
Sub-Adviser believes the overall portfolio is positioned to achieve its income
objective.

The Fund may invest up to 35% of its assets in fixed-income securities,
including up to 15% in "junk bonds". However, the Fund's normal strategy is to
be nearly fully invested in equity securities. normally has substantially less
than 35% of its assets invested in fixed-income securities. The Fund may also
invest up to 25% of its assets in foreign securities (not including its
investments in ADRs).

Principal Risks:

. Company Risk
. Derivatives Risk
. Investment Management Risk
. Market Risk

YEARLY PERFORMANCE

[BAR CHART APPEARS HERE]

During the period shown above the highest quarterly return was 19.48% for the
quarter ended 11/30/98 and the lowest was (16.18)% for the quarter ended
08/31/98.

John A. Levin & Co., Inc. became Sub-Adviser of the Fund on September 1, 1994.
Performance before that date is based on the performance of the Fund's previous
Sub-Advisor. J.P. Morgan Investment Management Inc. replaced John A. Levin &
Co., Inc. as Sub-Adviser of the Fund on April 1, 1999.

12
<PAGE>

PERFORMANCE TABLE

<TABLE>
------------------------------------------------------------------------------
Average Annual Total
Returns (for the periods
ending December 31, 1998) Past Past Life
One Year 5 Years Of Fund
------------------------------------------------------------------------------
<S> <C> <C> <C>
Fund Shares 16.43% 17.82% 15.53%
------------------------------------------------------------------------------
S&P 500 Index* 28.58% 24.06% 21.53%
------------------------------------------------------------------------------
</TABLE>

* The S&P 500 Index(R), reflecting reinvestment of dividends, is an unmanaged
index of 500 leading stocks. S&P 500(R) Index is a registered trademark of
Standard & Poor's Corporation.

SELECT INCOME FUND

Sub-Adviser: Standish, Ayer & Wood, Inc.

Investment Objective: The Fund seeks a high level of current income. The Fund
will invest primarily in investment grade, fixed-income securities.

Principal Investment Strategies: Examples of the types of securities in which
the Fund invests are corporate debt obligations such as bonds, notes and
debentures, and obligations convertible into common stock; commercial paper;
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities; and debt securities backed by various types of financial
assets. The Fund also may invest in mortgage-backed and asset-backed securities.
The Fund's investments in corporate debt securities are not limited to any
particular type of company or industry. The Fund may invest up to 25% of its
assets in foreign securities (not including its investments in ADRs), up to 35%
of its assets in money market instruments and up to 25% in debt obligations of
supranational entities.

The average maturity and the mix of portfolio securities will vary depending on
such factors as current market conditions and the comparative yields from
different instruments. The Fund invests primarily in investment grade
securities rated in the four highest grades by Moody's Investors Services or
Standard and Poor's Rating Services or similar rating organizations, and in
unrated securities. For more information about rating categories, see the
Appendix to the SAI. The Fund also may invest up to 25% of its assets in "junk
bonds."

Principal Risks:

. Credit Risk
. Interest Rate Risk
. Investment Management Risk
. Liquidity Risk
. Market Risk
. Prepayment Risk

13
<PAGE>

YEARLY PERFORMANCE

[BAR CHART APPEARS HERE]

During the period shown above the highest quarterly return was 6.22% for the
quarter ended 02/28/93 and the lowest was (6.40)% for the quarter ended
04/30/94.

PERFORMANCE TABLE

<TABLE>
------------------------------------------------------------------------------------------
Average Annual Total
Returns (for the periods Past Past Life
ending December 31, 1998) One Year 5 Years Of Fund
------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fund Shares 6.83% 6.05% 6.56%
------------------------------------------------------------------------------------------
Lehman Brothers 8.67% 7.27% 7.51%
Aggregate Bond Index*
------------------------------------------------------------------------------------------
</TABLE>

* The Lehman Brothers Aggregate Bond Index(R) is an unmanaged index of fixed
rate debt issues with an investment grade or higher rating at least one year to
maturity and an outstanding par value of at least $25 million.

MONEY MARKET FUND

Sub-Adviser: Allmerica Asset Management, Inc.

Investment Objective: The Fund seeks to obtain maximum current income consistent
with preservation of capital and liquidity.

Principal Investment Strategies: The Fund seeks to achieve its objective by
investing in high quality money market instruments such as obligations issued or
guaranteed by the United States Government, its agencies, or instrumentalities;
commercial paper; obligations of banks or savings and loan associations
including bankers acceptances and certificates of deposit; repurchase agreements
and cash and cash equivalents. The Fund may

14
<PAGE>

invest up to 25% of its assets in U.S. dollar denominated foreign securities
(not including its investments in ADRs).

Any security purchased for the Fund must receive the highest or second highest
quality rating by at least two recognized rating agencies or by one if only one
has rated the security. If the security is unrated the security must be seen by
the Sub-Adviser as having comparable quality. Portfolio securities will have a
remaining maturity of 397 days or less and the portfolio is managed to maintain
a dollar-weighted maturity of 90 days or less.

The Fund attempts to maintain a constant net asset value of $1.00 per share but
it may not be able to do so due to adverse market conditions or other factors.
An investment in the Fund is not a bank deposit and is not insured or guaranteed
by the Federal Deposit Insurance Corporation or any other government agency.

Principal Risks:

. Credit Risk
. Interest Rate Risk
. Investment Management Risk
. Market Risk

YEARLY PERFORMANCE

[BAR CHART APPEARS HERE]
<TABLE>
<S> <C>
1989 9.07%
1990 8.17%
1991 6.22%
1992 3.78%
1993 3.00%
1994 3.93%
1995 5.84%
1996 5.36%
1997 5.47%
1998 5.51%
</TABLE>

During the period shown above the highest quarterly return was 9.44% for the
quarter ended 06/30/89 and the lowest was 2.91% for the quarter ended 07/31/93.

15
<PAGE>

PERFORMANCE TABLE

<TABLE>
-----------------------------------------------------------------------
Average Annual Total
Returns (for the periods Past Past Past
ending December 31, 1998) One Year 5 Years 10 Years
-----------------------------------------------------------------------
<S> <C> <C> <C>
Fund Shares 5.51% 5.22% 5.62%
-----------------------------------------------------------------------
IBC/Donoghue First Tier 4.96% 4.80% 5.22%
Money Market Index*
-----------------------------------------------------------------------
</TABLE>

* IBC/Donoghue is an independent firm that tracks regulated money market funds
on a yield, shareholder, assets size and portfolio allocation basis. The Fund's
7-day yield ending December 31, 1998 was 5.11%.

EXPENSE SUMMARY

Expenses are one of several factors to consider when investing in a Fund.
Expenses shown are based on expenses incurred in respect of shares of the Funds
for the 1998 fiscal year. The Examples show the cumulative expenses
attributable to a hypothetical $10,000 investment in each Fund over specified
periods.

Fees and Expenses of the Funds
- ------------------------------

This table describes the fees and expenses that you may pay if you invest in the
Funds. Please note that the expenses listed below do not include the expenses
of the applicable variable insurance product that you are purchasing. You
should refer to the variable insurance product prospectus for more information
relating to the fees and expenses of that product, which are in addition to the
expenses of the Funds.

<TABLE>
<CAPTION>
Shareholder Annual Fund Operating Expenses Total Annual
Fees (expenses deducted from Fund assets) Fund
(fees paid directly Management Distribution Other Operating
from your investment) Fees (12b-1) Fees Expenses Expenses
--------------------- ---- ------------ -------- --------
<S> <C> <C> <C> <C> <C>
Select Emerging Markets Fund @ None 1.35%* None 1.19% 2.54%(1),(2)*
Select Aggressive Growth Fund None 0.88% None 0.07% 0.95%(1),(2)
Select Capital Appreciation Fund None 0.94% None 0.10% 1.04%(1),(2)
Select Value Opportunity Fund None 0.91%(1)* None 0.08% 0.99%(1),(2)*
Select International Equity Fund None 0.90% None 0.12% 1.02%(1),(2)
Select Growth Fund None 0.81%** None 0.05% 0.86%(1),(2)**
Select Strategic Growth Fund @ None 0.85%* None 0.81% 1.66%(1),(2)*
Select Growth and Income Fund None 0.68% None 0.05% 0.73%(1),(2)
Select Income Fund None 0.54% None 0.10% 0.64%(1)
Money Market Fund None 0.26% None 0.06% 0.32%(1)
</TABLE>

@ The Select Emerging Markets Fund and Select Strategic Growth Fund commenced
operations on February 20, 1998. Expenses shown are annualized.

* Amount does not reflect a voluntary expense limitation currently in effect for
the Select Emerging Markets Fund, Select Value Opportunity Fund, and Select
Strategic Growth Fund. For the year ended December 31, 1998, the Management
Fees and Total Annual Fund Operating Expenses were 1.00% and 2.19%,
respectively, for Select Emerging Markets Fund, 0.90% and 0.98%, respectively,
for Select Value Opportunity Fund, and 0.39% and 1.20%, respectively, for the
Select Strategic Growth Fund after the effect of the voluntary expense
limitations.

16
<PAGE>

** Effective June 1, 1998, the management fee rate for the Select Growth Fund
was revised. The Management Fee and Total Annual Fund Operating Expense
ratios shown in the table above have been adjusted to assume that the
revised rates took effect on January 1, 1998.

(1) Until further notice, Allmerica Financial Investment Management Services,
Inc. (the "Manager") has declared a voluntary expense limitation of 1.35%
of average net assets for the Select Aggressive Growth Fund and Select
Capital Appreciation Fund, 1.25% for the Select Value Opportunity Fund,
1.50% for the Select International Equity Fund, 1.20% for the Select Growth
Fund, 1.10% for the Select Growth and Income Fund, 1.00% for the Select
Income Fund, and 0.60% for the Money Market Fund. The total operating
expenses of these Funds of the Trust were less than their respective
expense limitations throughout 1998.

Until further notice, the Manager has declared a voluntary expense
limitation of 1.20% of average daily net assets for the Select Strategic
Growth Fund. In addition, the Manager has agreed to voluntarily waive its
management fee to the extent that expenses of the Select Emerging Markets
Fund exceed 2.00% of the Fund's average daily net assets. The amount of
such waiver shall not exceed the net amount of management fees earned by
the Manager from the Fund after subtracting fees paid by the Manager to the
Fund's Sub-Adviser.

Until further notice, the Select Value Opportunity Fund's management fee
rate has been voluntarily limited to an annual rate of 0.90% of average
daily net assets, and total expenses are limited to 1.25% of average daily
net assets.

The declaration of a voluntary Management fee or expense limitation in any
year does not bind the Manager to declare future expense limitations with
respect to these Funds. These limitations may be terminated at any time.

(2) These Funds have entered into agreements with brokers whereby brokers
rebate a portion of commissions. Had these amounts been treated as
reductions of expenses, the total annual fund operating expense ratios
would have been 2.19% for Select Emerging Market Fund, 0.92% for the Select
Aggressive Growth Fund, 1.02% for the Select Capital Appreciation Fund,
0.94% for the Select Value Opportunity Fund, 1.01% for the Select
International Equity Fund, 0.84% for the Select Growth Fund, 1.14% for the
Select Strategic Growth Fund, and 0.70% for the Select Growth and Income
Fund.

Example
- -------

This Example is intended to help you compare the cost of investing in a Fund
with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in a Fund for the time periods
indicated and then redeem all of

your shares at the end of those periods. The Example also assumes that your
investment earns a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Select Emerging Markets Fund $254 $781 $1,334 $2,840
Select Aggressive Growth Fund $ 95 $297 $ 515 $1,143
Select Capital Appreciation Fund $104 $325 $ 563 $1,246
Select Value Opportunity Fund $ 99 $309 $ 536 $1,189
Select International Equity Fund $102 $318 $ 552 $1,223
Select Growth Fund $ 86 $269 $ 467 $1,039
Select Strategic Growth Fund $166 $515 $ 887 $1,933
</TABLE>

17
<PAGE>

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Select Growth and Income Fund $73 $228 $398 $887
Select Income Fund $ 64 $200 $349 $781
Money Market Fund $ 32 $101 $176 $397
</TABLE>

DESCRIPTION OF PRINCIPAL INVESTMENT RISKS

The following is a summary of the principal risks of investing in a Fund and the
factors likely to cause the value of your investment in the Fund to decline. The
principal risks applicable to each Fund are identified under "Fund Summaries".
There are also many factors that could cause the value of your investment in a
Fund to decline which are not described here. It is important to remember that
there is no guarantee that the Funds will achieve their investment objective,
and an investor in any of the Funds could lose money.

COMPANY RISK

A Fund's equity and fixed income investments in a company often fluctuate based
on:

. the firm's actual and anticipated earnings,
. changes in management, product offerings and overall financial strength
and
. the potential for takeovers and acquisitions.

This is due to the fact that prices of securities react to the fiscal and
business conditions of the company that issued the securities. Factors affecting
a company's particular industry, such as increased production costs, also may
affect the value of its securities.

Smaller companies with market capitalizations of less than $1 billion or so are
more likely than larger companies to have limited products lines or smaller
markets for their goods and services. Small company stocks may not trade very
actively, and their prices may fluctuate more than stocks of other companies as
a result of lower liquidity. They may depend on a small or inexperienced
management group. Stocks of smaller companies also may be more vulnerable to
negative changes than stocks of larger companies.

CREDIT RISK

18
<PAGE>

levels of credit risk. Lower-rated or unrated securities of equivalent quality,
generally known as junk bonds, have very high levels of credit risk. Junk bonds
are considered to be speculative in their capacity to pay interest and repay
principal. The price of a fixed income security can be expected to fall if the
issuer defaults on its obligation to pay principal or interest, the rating
agencies downgrade the issuer's credit rating or there is negative news that
affects the market's perception of the issuer's credit risk.

CURRENCY RISK

This is the risk that the value of a Fund's investments may decline due to
fluctuations in exchange rates between the U.S. dollar and foreign currencies.
Funds that invest in securities denominated in or are receiving revenues in
foreign currencies are subject to currency risk. There is often a greater risk
of currency fluctuations and devaluations in emerging markets countries.

DERIVATIVES RISK

A Fund may use derivatives to hedge against an opposite position that the Fund
also holds. While hedging can reduce or eliminate losses, it can also reduce or
eliminate gains. When a Fund uses derivatives to hedge, it takes the risk that
changes in the value of the derivative will not match those of the asset being
hedged. Incomplete correlation can result in unanticipated losses. A Fund may
also use derivatives as an investment vehicle to gain market exposure. Gains or
losses from derivative investments may be substantially greater than the
derivative's original cost. When a Fund uses derivatives, it is also subject to
the risk that the other party to the agreement will not be able to perform.
Additional risks associated with derivatives include mispricing and improper
valuation.

EMERGING MARKETS RISK

Investments in emerging markets securities involve all of the risks of
investments in foreign securities, and also have additional risks. The markets
of developing countries have been more volatile than the markets of developed
countries with more mature economies. Many emerging markets companies in the
early stages of development are dependent on a small number of products and lack
substantial capital reserves. In addition, emerging markets often have less
developed legal and financial systems. These markets often have provided
significantly higher or lower rates of return than developed markets and usually
carry higher risks to investors than securities of companies in developed
countries.

19
<PAGE>

FOREIGN INVESTMENT RISK

Investing in foreign securities involves risks relating to political, social and
economic developments abroad, as well as risks resulting from the differences
between the regulations to which U.S. and foreign issuers and markets are
subject. These risks may include the seizure by the government of company
assets, excessive taxation, withholding taxes on dividends and interest,
limitations on the use or transfer of portfolio assets, and political or social
instability. In the event of nationalization, expropriation or other
confiscation, a Fund could lose its entire investment. Funds investing in
foreign securities may experience rapid changes in value. One reason for this
volatility is that the securities markets of many foreign countries are
relatively small, with a limited number of companies representing a small number
of industries. Enforcing legal rights may be difficult, costly and slow in
foreign countries. Also, foreign companies may not be subject to governmental
supervision or accounting standards comparable to those applicable to U.S.
companies, and there may be less public information about their operations.

INTEREST RATE RISK

When interest rates rise, the prices of fixed income securities in a Fund's
portfolio will generally fall. Conversely, when interest rates fall, the prices
of fixed income securities in the Fund's portfolio will generally rise. Even
Funds that invest in the highest quality debt securities are subject to interest
rate risk. Interest rate risk usually will affect the price of a fixed income
security more if the security has a longer maturity because changes in interest
rates are increasingly difficult to predict over longer periods of time. Fixed
income securities with longer maturities will therefore be more volatile than
other fixed income securities with shorter maturities.

LIQUIDITY RISK

This is the risk that a Fund will not be able to sell a security at a reasonable
price because there are too few people who actively buy and sell, or trade, that
security on a regular basis. Liquidity risk increases for Funds investing in
foreign investments (especially emerging markets securities), smaller companies,
lower credit quality bonds (also called junk bonds), restricted securities,
over-the-counter securities and derivatives.

INVESTMENT MANAGEMENT RISK

Investment management risk is the risk that a Fund does not achieve its
investment objective, even though the Sub-Adviser uses various investment
strategies and techniques.

20
<PAGE>

MARKET RISK

This is the risk that the price of a security held by a Fund will fall due to
changing economic, political or market conditions or to factors affecting
investor psychology.

PREPAYMENT RISK

While mortgage-backed securities may have a stated maturity, their expected
maturities may vary when interest rates rise or fall. When interest rates fall,
homeowners are more likely to prepay their mortgage loans which may result in an
unforeseen loss of interest income to a Fund. Also, because prepayments increase
when interest rates fall, the prices of mortgage-backed securities does not
increase as much as other fixed income securities when interest rates fall.

OTHER INVESTMENT STRATEGIES

The Fund Summaries starting on page 3 describe the investment objective and the
principal investment strategies and risks of each Fund. The Funds may at times
use the following investment strategies. Attached as Appendix A is a chart with
a listing of various investment techniques and strategies that the Sub-Advisers
of the Funds may utilize. A Fund may decide that it is in the best interests of
shareholders to make changes to its investment objective and strategies
described in this Prospectus. These investment objectives and strategies may be
changed with the approval of the Board of Trustees, but without shareholder
approval.

Derivative Investments. (APPLICABLE TO EACH FUND EXCEPT THE MONEY MARKET FUND)
- ----------------------
Instead of investing directly in the types of portfolio securities described in
the Summary, each Fund, except the Money Market Fund, may buy or sell a variety
of "derivative" investments to gain exposure to particular securities or
markets. Derivatives are financial contracts whose value depends on, or is
derived from, the value of an underlying asset, reference rate or index. A
Fund's Sub-Adviser will sometimes use derivatives as part of a strategy designed
to reduce other risks and sometimes will use derivatives to enhance returns,
which increases opportunities for gain but also involves greater risk.

21
<PAGE>

country or (ii) at least 50% of the company's assets are situated in the
country. A Fund may invest in foreign securities either directly or indirectly
through the use of depositary receipts, such as ADRs. Depositary receipts are
generally issued by banks or trust companies and evidence ownership of
underlying foreign securities. An ADR may be sponsored by the issuer of the
underlying foreign security or it may be issued in unsponsored form. The holder
of a sponsored ADR is likely to receive more frequent and extensive financial
disclosure concerning the foreign issuer than the holder of an unsponsored ADR
and generally will bear lower transaction charges. The Select Capital
Appreciation Fund and Select International Equity Fund may also purchase foreign
securities through European Depositary Receipts and Global Depositary Receipts.

High Yield Securities. (APPLICABLE TO THE SELECT EMERGING MARKETS FUND, SELECT
- ---------------------
CAPITAL APPRECIATION FUND, SELECT GROWTH FUND, SELECT GROWTH AND INCOME FUND,
AND SELECT INCOME FUND) The Select Emerging Markets Fund, Select Capital
Appreciation Fund, Select Growth Fund, Select Growth and Income Fund, and Select
Income Fund may purchase corporate debt securities which are high yield
securities, or "junk bonds" (rated at the time of purchase BB or lower by
Moody's or S&P, or equivalently rated by another rating agency, or unrated but
believed by the Sub-Adviser to have similar quality.) These securities are
considered to be speculative in their capacity to pay interest and repay
principal.

Lending of Securities. (APPLICABLE TO ALL FUNDS) To realize additional income,
- ---------------------
the Funds may lend portfolio securities to broker-dealer or financial
institutions in an amount up to 33-1/3% of a Fund's total assets. While any such
loan is outstanding, a Fund will continue to receive amounts equal to the
interest or dividends paid by the issuer on the securities, as well as interest
(less any rebates to be paid to the borrower) on the investment of the
collateral or a fee from the borrower. Each Fund will have the right to call
each loan and obtain the securities. Lending portfolio securities involves
possible delays in receiving additional collateral or in the recovery of the
securities or possible loss of rights in the collateral.

Restricted Securities. (APPLICABLE TO ALL FUNDS) The Funds may purchase fixed-
- ---------------------
income securities that are not registered under Federal securities law
("restricted securities"), but can be offered and sold to certain "qualified
institutional buyers". Each Fund will not invest more than 15% (10% for the
Money Market Fund) of its net assets in restricted securities (and securities
deemed to be illiquid). These limits do not apply if the Board of Trustees
determines that the restricted securities are liquid. The Board of Trustees has
adopted guidelines and delegated to the Manager the daily function of
determining and monitoring liquidity of restricted securities. The Board,
however, retains sufficient oversight and is ultimately responsible for the
determinations. This investment practice could increase the level of illiquidity
in a Fund if buyers lose interest in restricted securities. As a result, a Fund
might not be able to sell these securities when its Sub-Adviser wants to sell,
or might have to sell them at less than fair value. In addition, market
quotations for these securities are less readily available.

22
<PAGE>

Temporary Defensive Strategies. At times a Sub-Adviser may determine that
- ------------------------------
market conditions make it desirable temporarily to suspend a Fund's normal
investment activities. This is when the Fund may temporarily invest in a variety
of lower-risk securities, such as U.S. Government and other high quality bonds
and short-term debt obligations. Such strategies attempt to reduce changes in
the value of the Fund's shares. The Fund may not achieve its investment
objective while these strategies are in effect.

Frequent Trading. Certain Funds from time to time may engage in active and
- ----------------
frequent trading to achieve their principal investment strategies. This may
result in a realization and distribution to shareholders of higher capital
gains, which would increase the investors' tax liability. Frequent trading
increases transaction costs, which could detract from the Fund's performance.

MANAGEMENT OF THE FUNDS

The Trust is governed by a Board of Trustees. Allmerica Financial Investment
Management Services, Inc. is the investment Manager of the Trust responsible for
managing the Trust's day-to-day business affairs. The Manager is located at 440
Lincoln Street, Worcester, MA 01653. The Manager and its predecessor, Allmerica
Investment Management Company, Inc., have been managing mutual funds since 1985.
The Manager currently serves as investment manager to one other mutual fund.
Sub-Advisers have been hired to manage the investments of the Funds. The Trust
and Manager have obtained an order of exemption from the SEC that permits the
Manager to enter into and materially amend sub-advisory agreements with non-
affiliated Sub-Advisers without obtaining shareholder approval. The Manager has
ultimate responsibility to oversee Sub-Advisers. The Manager has the ability,
subject to approval of the Trustees, to hire and terminate Sub-Advisers and to
change materially the terms of the Sub-Adviser Agreements, including the
compensation paid to the Sub-Advisers, without the approval of the shareholders
of the Funds. The Sub-Advisers have been selected by the Manager and Trustees
with the help of BARRA RogersCasey, Inc., a pension consulting firm. The fees
earned by each Sub-Adviser and BARRA RogersCasey are paid by the Manager. The
performance by the Sub-Advisers is reviewed quarterly by a committee of the
Board of Trustees, with assistance from BARRA RogersCasey.

The following table provides information about each Fund's Sub-Adviser:

23
<PAGE>

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
FUND NAME,
SUB-ADVISER NAME AND ADDRESS EXPERIENCE

- -------------------------------------------------------------------------------------------------------------------
<S> <C>
Select Emerging Markets Fund Organized in 1980 and has $27.1 billion assets under
- ----------------------------
Schroder Capital Management management as of December 31, 1998. Provides
International Inc. global equity and fixed income management services
787 Seventh Avenue to mutual funds and other institutional investors.
New York, NY 10019

- -------------------------------------------------------------------------------------------------------------------
Select Aggressive Growth Fund Has over $31 billion assets under
- -----------------------------
Nicholas-Applegate Capital Management, L.P. management as of January 21, 1999.
600 West Broadway, Suite 2900 Founded in 1984. Clients include employee
San Diego, CA 92101 benefit and retirement plans, foundations,
investment companies and individuals.

- -------------------------------------------------------------------------------------------------------------------
Select Capital Appreciation Fund Manages with its affiliates assets totaling $148
- --------------------------------
T. Rowe Price Associates, Inc. billion as of December 31, 1998 for seven million
100 East Pratt Street individual and institutional investor accounts.
Baltimore, MD 21202 Founded in 1937.

- -------------------------------------------------------------------------------------------------------------------
Select Value Opportunity Fund Established in 1973. Over $4.3 billion assets
- -----------------------------
Cramer Rosenthal McGlynn, LLC under management as of December 31, 1998.
707 Westchester Avenue Provides investment advice to mutual funds,
White Plains, NY 10604 individuals, government agencies, pension plans
and trusts.

- -------------------------------------------------------------------------------------------------------------------
Select International Equity Fund Managed over $38 billion in global securities as
- --------------------------------
Bank of Ireland Asset Management (U.S.) Ltd. of December 31, 1998. Founded in 1966. Provides
26 Fitzwilliam Place, Dublin 2, Ireland and international investment management services.
20 Horseneck Lane
Greenwich, CT 06830

- -------------------------------------------------------------------------------------------------------------------
Select Growth Fund As of December 31, 1998, $294 billion assets under
- ------------------
Putnam Investment Management, Inc. management, including affiliates. Investment
One Post Office Square manager of mutual funds and other clients since
Boston, MA 02109 1937.

- -------------------------------------------------------------------------------------------------------------------
Select Strategic Growth Fund Began operations in 1973. Manages portfolios for
- ----------------------------
Cambiar Investors, Inc. corporations, pension plans and financial
8400 East Prentice Avenue institutions. As of December 31, 1998, $2.3
Suite 460 billion assets under management.
Englewood, CO 80111

- -------------------------------------------------------------------------------------------------------------------
Select Growth and Income Fund Incorporated in 1984. With affiliates, over $300
- ----------------------------- billion assets under management as of December 31,
J.P. Morgan Investment Management Inc. 1998. Serves as investment adviser for employee
522 Fifth Avenue benefit plans and other institutional assets, as well
New York, NY 10036 as mutual funds and variable annuities.

- -------------------------------------------------------------------------------------------------------------------
Select Income Fund Founded in 1933. $46 billion in assets under
- ------------------
Standish, Ayer & Wood, Inc. management. Manages portfolios for pension plans,
One Financial Center financial institutions and endowment and
Boston, MA 02111 foundation funds.

- -------------------------------------------------------------------------------------------------------------------
Money Market Fund Incorporated in 1993. $8.4 billion assets under
- -----------------
Allmerica Asset Management, Inc. management as of December 31, 1998. Serves as
440 Lincoln Street investment adviser to investment companies and
Worcester, MA 01653 affiliated insurance company accounts.

- -------------------------------------------------------------------------------------------------------------------
</TABLE>

24
<PAGE>

For a sample listing of certain of the Sub-Advisers' clients, see
"Investment Management and Other Services" in the SAI.
The following individuals or groups of individuals are primarily
responsible for the day-to-day management of the Funds' portfolios:

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
FUND NAME AND SUB- NAME AND TITLE OF SERVICE WITH BUSINESS EXPERIENCE
ADVISER NAME PORTFOLIO MANAGER(S) SUB-ADVISER FOR PAST FIVE YEARS
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Select Emerging Markets Fund John A. Troiano, Chief Executive and 1981 - Present Joined SCMI as an investment
- ----------------------------
Schroder Capital Management Chairman of Emerging Markets Committee analyst specializing in
International Inc. ("SCMI") engineering and technology; In
1989 set up SCMI's Latin
American team.

Mark Bridgeman, First Vice President 1990 - Present Joined SCMI in 1990 and is Fund
Manager specializing in African
markets.

Heather F. Crighton, Director 1993 - Present Joined SCMI in 1993 as Fund
Manager specializing in Asian
emerging markets.
- ---------------------------------------------------------------------------------------------------------------------------------
Select Aggressive Growth Fund Lawrence S. Speidell, Partner 1994 - Present Director of Global/Systematic
- -----------------------------
Nicholas-Applegate Capital Portfolio Management and Rearch
Management, L.P. ("NACM") at NACM. Prior to joining NACM,
he spent ten years with
Batterymarch Financial
Management.

John J. Kane, Partner 1994 - Present Senior Portfolio Manager for
the U.S. Systematic portfolios
at NACM. Prior to joining NACM
in 1994, he was employed by
ARCO Investment Management
Company and General Electric.

Mark W. Stuckelman, Portfolio Manager 1995 - Present Portfolio Manager for the U.S.
Systematic portfolios at NACM.
Prior to joining NACM, he was
employed for five years with
Wells Fargo Bank, Fidelity
Management Trust Co., and
BARRA, Inc.

- ---------------------------------------------------------------------------------------------------------------------------------
Select Capital Appreciation Fund Brian W.H. Berghuis, Chartered 1985 - Present He has fifteen years experience
- --------------------------------
T. Rowe Price Associates, Inc. ("T. Financial Analyst in equity research and
Rowe Price") portfolio management. He is
Chairman of the investment
team for the Fund.

John F. Wakeman, Research Analyst & 1989 - Present He spent nine years with T. Rowe
Portfolio Manager Price as a research analyst and
portfolio manager and has
eleven years' experience in
equity research.

Marc L. Baylin, Chartered Financial 1993 - Present He has seven years of investment
Analyst experience in equity research
and has been with T. Rowe Price
for the past five years as a
Research Analyst.
- ---------------------------------------------------------------------------------------------------------------------------------
Select Value Opportunity Fund Ronald H. McGlynn, CEO and President of 1995 - Present He joined Cramer Rosenthal in
- -----------------------------
Cramer, Rosenthal, McGlynn, LLC Cramer Rosenthal 1973, has 29 years of investment
("Cramer Rosenthal") experience and serves as Co-
Chief Investment Officer and
Portfolio Manager.

Jay B. Abramson, Executive Vice 1995 - Present He has been with Cramer
President and Director of Research and Rosenthal since 1985 and his
Co-Chief Investment Officer overall responsibility is for
investment research.
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

25
<PAGE>

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
FUND NAME AND SUB- NAME AND TITLE OF SERVICE WITH BUSINESS EXPERIENCE
ADVISER NAME PORTFOLIO MANAGER(S) SUB-ADVISER FOR PAST FIVE YEARS
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Select International Equity Fund Christopher Reilly, Chief Investment 1980 - Present Since 1985, he has had overall
- --------------------------------
Bank of Ireland Asset Management Officer responsibility for asset
(U.S.) Limited ("BIAM") management. He previously
worked in the United Kingdom in
stockbrokering and investment
management.

Denis Donovan, Director-Portfolio 1985 - Present Prior to joining BIAM , he
Manager spent more than 13 years in the
money market and foreign
exchange operations of the
Central Bank of Ireland. At
present, he has overall
responsibility for the
portfolio management function
for all of BIAM's client base.

Peter Wood 1985 - Present Prior to 1985, he spent five
years with another leading
investment management firm.
He is now responsible for
portfolio construction at BIAM.

Jane Neill, Senior Equity Analyst 1994 - Present Previously, she was Chief
Investment Officer with another
leading Irish investment
management firm.

- -----------------------------------------------------------------------------------------------------------------------------------
Select Growth Fund C. Beth Cotner, CFA, Chief Investment 1995 - Present Prior to 1995, Ms. Cotner was
- -------------------
Putnam Investment Management, Inc. Officer Executive Vice President at
("Putnam") Kemper Financial Services.

Manuel Weiss, CFA, Senior Vice President 1987 - Present He has been an investment
professional with Putnam
since 1987.

- -----------------------------------------------------------------------------------------------------------------------------------
Select Strategic Growth Fund Michael S. Barish, CFA and President 1973 - Present He founded Cambiar in 1973 and
- ---------------------------- has 36 years of investment
Cambiar Investors, Inc. ("Cambiar") experience. He is a generalist
and is responsible for the
consumer goods and healthcare
securities.

Kathleen M. McCarty, CFA, Senior Vice 1987 - Present Prior to 1987, Ms. McCarty was
President employed by Dain Bosworth as
Vice President of Research.
She is responsible for financial
services, communication services
and utilities securities.

Michael J. Gardner, CFA and Vice 1995 - Present Prior to 1995, Mr. Gardner was
President employed by Simmons & Co. He is
responsible for energy and
capital goods securities.

- -----------------------------------------------------------------------------------------------------------------------------------
Select Growth and Income Fund Bernard A. Kroll, Vice President 1996 - Present Prior to joining J.P. Morgan in
- ----------------------------- 1996, Mr. Kroll was an equity
J.P. Morgan Investment Management derivatives specialist at
Inc. ("J.P. Morgan") Goldman Sachs & Co., founded
his own software development
firm and options broker-dealer,
and managed several derivatives
businesses at Kidder, Peabody
& Co. He is a portfolio manager
in the Structured Equity Group.

Timothy J. Devlin, Vice President 1996 - Present Prior to joining J.P. Morgan
in 1996, Mr. Devlin was an
equity portfolio manager at
Mitchell Hutchins Asset
Management Inc. He is a port-
folio manager in the Structured
Equity Group.

James C. Weiss, Vice President 1992 - Present He is a portfolio manager in
the Structured Equity Group
and has been at J.P. Morgan
since 1992.
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

26
<PAGE>

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
FUND NAME AND SUB- NAME AND TITLE OF SERVICE WITH BUSINESS EXPERIENCE
ADVISER NAME PORTFOLIO MANAGER(S) SUB-ADVISER FOR PAST FIVE YEARS
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Select Income Fund Edward H. Ladd, Chairman and Managing 1962 - Present He is the firm's economist and
- ------------------ Director also assists clients in
Standish, Ayer & Wood, Inc. ("SAW") establishing investment
strategies. Mr. Ladd is a
Director of the Federal Reserve
Bank of Boston, New England
Electric System, Greylock
Management and Harvard
Management Corp. and a
member of SAW's Executive
Committee.

George W. Noyes, President and Managing 1970 - Present He directs bond policy
Director formulation and manages
institutional bond portfolios
at SAW. Mr. Noyes is Vice
Chairman of the ICFA Research
Foundation and serves on SAW's
Executive Committee.

Dolores S. Driscoll, Managing Director 1974 - Present She manages fixed-income
portfolios with specific
emphasis on mortgage pass-
throughs and original issue
discount bonds. Ms. Driscoll
also serves on SAW's Executive
Committee.

Richard C. Doll, Manager 1984 - Present He is a portfolio manager with
research responsibilities in
convertible bonds. Prior to
joining SAW, Mr. Doll was a
Vice President with the Bank of
New England.

Maria D. Furman, Vice President and 1976 - Present She is head of the tax-exempt
Director area and manages insurance and
pension fund accounts. Ms.
Furman currently serves on SAW's
Executive Committee.

- -----------------------------------------------------------------------------------------------------------------------------------
Money Market Fund John C. Donohue, Vice President 1995 - Present He was a portfolio manager at
- -----------------
Allmerica Asset Management, Inc. CS First Boston Investment
("AAM") prior to joining AAM.
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

For the fiscal year ended December 31, 1998, the Funds paid the Manager the fees
shown in the table below:

FEE (AS A PERCENTAGE OF
FUND AVERAGE NET ASSETS)
---- -------------------

Select Emerging Markets Fund............. 1.35%
Select Aggressive Growth Fund............ 0.88%
Select Capital Appreciation Fund......... 0.94%
Select Value Opportunity Fund............ 0.91%
Select International Equity Fund......... 0.90%
Select Growth Fund....................... 0.82%
Select Strategic Growth Fund............. 0.85%
Select Growth and Income Fund............ 0.68%
Select Income Fund....................... 0.54%
Money Market Fund........................ 0.26%

For fiscal year ended December 31, 1998, the Manager paid each Sub-Adviser
aggregate fees as set forth below:

27
<PAGE>

_________________________

/(1)/ The Select Emerging Markets Fund began operations on February 20, 1998.
For its services, Schroder Capital Management International Inc. will receive a
fee computed daily at an annual rate based on the average daily net assets of
the Select Emerging Markets Fund, under the following schedule:

ASSETS RATE
------ ----
First $50 Million..................... 1.00%
Next $50 Million...................... 0.85%
Next $150 Million..................... 0.75%
Over $250 Million..................... 0.60%

/(2)/ The Select Strategic Growth Fund began operations on February 20, 1998.
For its services, Cambiar Investors, Inc. will receive a fee computed daily at
an annual rate based on the average daily net assets of the Select Strategic
Growth Fund, under the following schedule:

ASSETS RATE
------ ----
First $50 Million..................... 0.50%
Next $100 Million..................... 0.45%
Next $100 Million..................... 0.35%
Next $100 Million..................... 0.30%
Over $350 Million..................... 0.25%

*T. Rowe Price Associates, Inc. assumed Sub-Adviser responsibilities from Janus
Capital Corporation on April 1, 1998. Janus Capital Corporation served as Sub-
Adviser of the Select Capital Appreciation Fund from April 28, 1995 to March 31,
1998. Janus Capital Corporation received a fee computed daily at an annual rate
based on the average daily net assets of the Select Capital Appreciation Fund,
based on the following schedule:

28
<PAGE>

ASSETS RATE
------ ----
First $100 Million..................... 0.60%
Over $100 Million...................... 0.55%
Next $250 Million...................... 0.50%
Over $500 Million...................... 0.45%

T. Rowe Price Associates, Inc. receives a fee computed daily at an annual rate
of 0.50% based on the average daily net assets of the Select Capital
Appreciation Fund.

** J.P. Morgan Investment Management Inc. replaced John A. Levin & Co., Inc. as
Sub-Adviser of the Select Growth and Income Fund on April 1, 1999.

PRICING OF FUND SHARES

The Funds sell and redeem their shares at a price equal to their net asset value
("NAV") without paying any sales or redemption charges. The NAV of a share is
computed by adding the current value of all the Fund's assets, subtracting its
liabilities and dividing by the number of its outstanding shares. NAV is
computed once daily at the close of regular trading on the New York Stock
Exchange each day the Exchange is open - normally 4:00 p.m. Eastern Time.
Orders for the purchase or redemption of shares are filled at the next NAV
computed after an order is received by the Fund. The Funds do not accept orders
or compute their NAV's on days when the Exchange is closed.

Equity securities are valued based on market value if market quotations are
readily available. In other cases, they are valued at their fair value
following procedures approved by the Trustees. Debt securities (other than
short-term obligations) normally are valued based on pricing service valuations.
All securities of the Money Market Fund are valued at amortized cost. Debt
obligations in the other Funds with a remaining maturity of 60 days or less are
valued at amortized cost when amortized cost is considered to represent fair
value. Values for short-term obligations of the other Funds having a remaining
maturity of more than 60 days are based upon readily available market
quotations.

Certain foreign markets may be open on days when the Funds do not accept orders
or price their shares. As a result, the NAV of a Fund's shares may change on
days when shareholders will not be able to buy or sell shares.

PURCHASE AND REDEMPTION OF SHARES

29
<PAGE>

in the Funds. The Trust has obtained an exemptive order from the Securities and
Exchange Commission to permit Fund shares to be sold to variable annuity and
variable life insurance separate accounts of both affiliated and unaffiliated
life insurance companies and certain qualified pension and retirement plans.
Material irreconcilable conflicts may arise among various insurance policy
owners and plan participants. The Trustees will monitor events to identify any
material conflicts and determine if any action should be taken to resolve such
conflict.

No fee is charged by the Trust on redemption. The variable contracts funded
through the Separate Accounts are sold subject to certain fees and charges which
may include sales and redemption charges. See the Prospectuses for the variable
insurance products.

Normally, redemption payments will be made within seven days after the Trust
receives a written redemption request. Redemptions may be suspended when
trading on the New York Stock Exchange is restricted or when permitted by the
Securities and Exchange Commission.

DISTRIBUTIONS AND TAXES

Distributions
- -------------

Each Fund pays out substantially all of its net investment income and net
capital gains to shareholders each year. Net investment income is paid
quarterly in the case of the Select Growth and Income Fund and Select Income
Fund; annually in the case of the Select Emerging Markets Fund, Select
Aggressive Growth Fund, Select Capital Appreciation Fund, Select Value
Opportunity Fund, Select International Equity Fund, Select Growth Fund and
Select Strategic Growth Fund; and daily in the case of the Money Market Fund.
Distributions of net capital gains for the year, if any, are made annually. All
dividends and capital gain distributions are applied to purchase additional Fund
shares at net asset value as of the payment date. Fund shares are held by the
Separate Accounts and any distributions are reinvested automatically by the
Separate Accounts.

Taxes
- -----

The Trust seeks to comply with the provisions of the Internal Revenue Code
applicable to regulated investment companies so that the Trust will not be
subject to federal income tax. Under current tax law, dividend or capital gain
distributions from any Fund are not currently taxable when left to accumulate
within a variable annuity or variable life insurance contract. Withdrawals from
a contract generally are subject to ordinary income tax and, in many cases, to
an additional 10% penalty tax on withdrawals before age 59 1/2. Tax

30
<PAGE>

consequences to investors in the Separate Accounts which are invested in the
Trust are described in more detail in the prospectuses for those accounts.

YEAR 2000

Some computer software cannot distinguish between dates in the year 2000 and
dates in the year 1900 because of the way that dates are encoded and calculated.
The services provided to the Trust by the Manager, Sub-Advisers, the Custodian
and other external service providers depend on the proper functioning of their
computer software. Failure to correct or replace any non-compliant software
could adversely affect, among other things, the handling of securities trades,
the payment of interest and dividends, the pricing of the Trust's securities and
of the Trust's shares, and account services. The Trust has requested
information from its service providers with respect to their plans to be Year
2000 compliant. The Trust has been advised by its service providers that they
either are Year 2000 compliant now or expect to be compliant prior to December
31, 1999. However, there can be no guarantee that the Trust's operations will
not be adversely affected by non-compliant systems of its service providers or
of other third parties which interact with such service providers. The Year 2000
problem could also have an adverse effect on issuers whose securities are owned
by the Funds, potentially decreasing the value of such securities.

- ----------------------------
The conversion of certain European currencies to the "euro" may present
additional risks to those Funds exposed to such currencies.

FINANCIAL HIGHLIGHTS

The financial highlights tables are intended to help you understand each Fund's
financial performance for the past five years (or, if shorter, the period of the
Fund's operations). Certain information reflects financial results for a single
Fund share. The total returns in the tables represent the rate that an investor
would have earned or lost on an investment in a Fund (assuming reinvestment of
all dividends and distributions). This information has been audited by
PricewaterhouseCoopers LLP, whose report, along with each Fund's financial
statements, are included in the Statement of Additional Information or annual
report, which is available upon request.

[Sample format]
The Fund
- ---------------

31
<PAGE>

Dividends (from net investment income)
Distributions (from capital gains)
Returns of Capital
Total Distributions

Net Asset Value, End of Period

Total Return
- ------------
................................................................................

Ratios/Supplemental Data
- ------------------------

Net Assets, End of Period
Ratios of Expenses to Average Net Assets
Ratios of Net Income to Average Net Assets
Portfolio Turnover Rate

32
<PAGE>

[Back Cover]

ALLMERICA INVESTMENT TRUST

Select Emerging Markets Fund
Select Aggressive Growth Fund
Select Capital Appreciation Fund
Select Value Opportunity Fund
Select International Equity Fund
Select Growth Fund
Select Strategic Growth Fund
Select Growth and Income Fund
Select Income Fund
Money Market Fund

440 Lincoln Street
Worcester, Massachusetts 01653
(508) 855-1000

The Trust's Statement of Additional Information (SAI) includes additional
information about the Funds. The Trust's annual and semi-annual reports to
shareholders include information about the investments of the Funds. The SAI
and the financial statements included in the Fund's most recent annual report to
shareholders are incorporated by reference into this prospectus, which means
they are part of this prospectus for legal purposes. The Trust's annual report
discusses the market conditions and investment strategies that significantly
affected each Fund's performance during its last fiscal year. You may get free
copies of these materials, request other information about a Fund or make
shareholder inquiries by calling 1-800-______.

You may review and copy information about the Trust including its SAI, at the
Securities and Exchange Commission's Public Reference Room in Washington, D.C.
You may call the Commission at 1-800-SEC-0330 for information about the
operation of the Public Reference Room. You may also access reports and other
information about the Trust on the Commission's Internet site at
HTTP://WWW.SEC.GOV. You may get copies of this information, with payment of a
duplication fee, by writing the Public Reference Section of the Commission,
Washington, D.C. 20549-6009. You may need to refer to the Trust's file number
under the Investment Company Act, which is 811-4138.

33
<PAGE>

APPENDIX A
----------

INVESTMENT TECHNIQUES AND STRATEGIES
- ------------------------------------

In managing its portfolios of investments, the Trust may make use of the
following investment techniques and strategies:

SYMBOLS
- -------
. Permitted
- ----- Not Permitted

<TABLE>
<CAPTION>
SELECT SELECT SELECT
EMERGING AGGRESSIVE SELECT CAPITAL SELECT VALUE SELECT SELECT STRATEGIC
MARKETS GROWTH APPRECIATION OPPORTUNITY INTERNATIONAL GROWTH GROWTH
INVESTMENT TECHNIQUE/STRATEGY FUND FUND FUND FUND EQUITY FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Asset-Backed Securities ---- ---- ---- ---- ---- ---- ----
Financial Futures Contracts
and Related Options . . . . . . .
Foreign Securities . . . . . . .
Forward Commitments ---- ---- . ---- ---- ---- ----
Forward Contracts on Foreign Currencies . ---- . ---- . . ----
High Yield Securities . ---- . ---- ---- . ----
Investments in Money Market: Securities . . . . . . .
Mortgage-Backed Securities ---- ---- ---- ---- ---- ---- ----
Purchasing Options . . . . . . .
Repurchase Agreements . . . . . . .
Restricted Securities . . . . . . .
Reverse Repurchase Agreements ---- ---- . ---- ---- ---- ----
Securities Lending . . . . . . .
Stand-By Commitments ---- ---- ---- ---- ---- ---- ----
Stripped Mortgage-Backed Securities ---- ---- ---- ---- ---- ---- ----
Swap and Swap-Related Products ---- ---- . ---- ---- ---- ----
When-Issued Securities . . . . . . .
Writing Covered Options . . . . . . .

<CAPTION>
SELECT
GROWTH AND SELECT MONEY
INCOME INCOME MARKET
INVESTMENT TECHNIQUE/STRATEGY FUND FUND FUND
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
Asset-Backed Securities . . .
Financial Futures Contracts
and Related Options . . ----
Foreign Securities . . .
Forward Commitments ---- . .
Forward Contracts on Foreign Currencies ---- . ----
High Yield Securities . . ----
Investments in Money Market: Securities . . .
Mortgage-Backed Securities ---- . ----
Purchasing Options . . ----
Repurchase Agreements . . .
Restricted Securities . . .
Reverse Repurchase Agreements ---- ---- ----
Securities Lending . . .
Stand-By Commitments ---- . .
Stripped Mortgage-Backed Securities ---- . ----
Swap and Swap-Related Products ---- ---- ----
When-Issued Securities . . .
Writing Covered Options . . ----
- -----------------------------------------------------------------------------------
</TABLE>
<PAGE>

ALLMERICA INVESTMENT TRUST

PROSPECTUS DATED: MAY 1, 1999

This Prospectus describes the following 7 investment Funds of the Trust which
serve as the underlying investments for insurance related accounts.

SELECT AGGRESSIVE GROWTH FUND
SELECT INTERNATIONAL EQUITY FUND
GROWTH FUND
EQUITY INDEX FUND
INVESTMENT GRADE INCOME FUND
GOVERNMENT BOND FUND
MONEY MARKET FUND

This Prospectus explains what you should know about each of the Funds before you
invest. Please read it carefully before you invest.

440 LINCOLN STREET
WORCESTER, MASSACHUSETTS 01653
(508) 855-1000
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S> <C>
FUND SUMMARIES......................................................................... 3
Objectives, Strategies and Risks..................................................... 3
Select Aggressive Growth Fund..................................................... 3
Select International Equity Fund.................................................. 5
Growth Fund....................................................................... 6
Equity Index Fund................................................................. 7
Investment Grade Income Fund...................................................... 8
Government Bond Fund.............................................................. 10
Money Market Fund................................................................. 11

EXPENSE SUMMARY........................................................................ 13

DESCRIPTION OF PRINCIPAL INVESTMENT RISKS.............................................. 14

OTHER INVESTMENT STRATEGIES............................................................ 17

MANAGEMENT OF THE FUNDS................................................................ 19

PRICING OF FUND SHARES................................................................. 22

PURCHASE AND REDEMPTION OF SHARES...................................................... 23

DISTRIBUTIONS AND TAXES................................................................ 24

YEAR 2000.............................................................................. 24

FINANCIAL HIGHLIGHTS................................................................... 25
</TABLE>

2
<PAGE>

FUND SUMMARIES

Allmerica Investment Trust provides a broad range of investment options through
7 separate investment portfolios, or Funds. Shares of the Funds are sold
exclusively to variable annuity and variable life insurance Separate Accounts
and qualified pension and retirement plans.

The following summaries describe each Fund's investment objective and principal
investment strategies, identify the principal investment risks of investing in
the Fund, and provides performance charts for the Fund. Note that any
percentage limitations listed under a Fund's principal investment strategies
apply at the time of investment. The principal risks are discussed in more
detail under "Description of Principal Investment Risks". The bar charts show
how the investment returns of the shares of a Fund have varied in the past ten
years (or for the life of the Fund if less than 10 years). The table following
each bar chart shows how the Fund's average annual return for the last one, five
and ten years (or for the life of the Fund, if shorter) compare to those of a
broad-based securities market index. PAST PERFORMANCE DOES NOT NECESSARILY
INDICATE HOW THE FUND WILL PERFORM IN THE FUTURE. The bar charts and tables
give some indication of the risks of investing in each Fund by showing changes
in the Fund's performance.

OBJECTIVES, STRATEGIES AND RISKS
- --------------------------------

SELECT AGGRESSIVE GROWTH FUND
Sub-Adviser: Nicholas-Applegate Capital Management, L.P.

Investment Objective: The Fund seeks above-average capital appreciation by
investing primarily in common stocks of companies which are believed to have
significant potential for capital appreciation.

3
<PAGE>

Principal Risks:

. Company Risk
. Derivatives Risk
. Investment Management Risk
. Liquidity Risk

[BAR CHART APPEARS HERE]
<TABLE>
<S> <C>
1993 19.51%
1994 -2.31%
1995 32.28%
1996 18.55%
1997 18.71%
1998 10.56%
</TABLE>

. Market Risk

During the period shown above the highest quarterly return was 30.61% for the
quarter ended 06/30/97 and the lowest was (24.40)% for the quarter ended
08/31/98.

PERFORMANCE TABLE

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Average Annual Total
Returns (for the periods Past Past Life
ending December 31, 1998) One Year 5 Years Of Fund
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fund Shares 10.56% 14.99% 18.11%
- -------------------------------------------------------------------------------------------------
Russell 2500 Index* 0.38% 14.13% 16.27%
- -------------------------------------------------------------------------------------------------
</TABLE>

* The Russell 2500 Index is an unmanaged composite of 2,500 small-to-mid
capitalization stocks.

4
<PAGE>

SELECT INTERNATIONAL EQUITY FUND
Sub-Adviser: Bank of Ireland Asset Management (U.S.) Limited

Investment Objective: The Fund seeks maximum long-term total return (capital
appreciation and income) primarily by investing in common stocks of established
non-U.S. companies.

Principal Risks:

. Company Risk
. Currency Risk
. Derivatives Risk
. Foreign Investment Risk
. Investment Management Risk
. Market Risk

[BAR CHART APPEARS HERE]

During the period shown above the highest quarterly return was 19.49% for the
quarter ended 12/31/98 and the lowest was (17.69)% for the quarter ended
09/30/98.

5
<PAGE>

PERFORMANCE TABLE

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Average Annual Total Returns (for the Past Life
periods ending December 31, 1998) One Year Of Fund
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Fund Shares 16.48% 12.26%
- ----------------------------------------------------------------------------------------------------------
Morgan Stanley Capital International EAFE Index* 20.33% 8.41%
- ---------------------------------------------------------------------------------------------------------
</TABLE>

GROWTH FUND
Sub-Adviser: Miller Anderson & Sherrerd, LLP

Investment Objective: The Fund seeks to achieve long-term growth of capital
through investments primarily in common stocks and securities convertible into
common stocks that are believed to represent significant underlying value in
relation to current market prices. Realization of current income, if any, is
incidental to this objective.

Principal Investment Strategies: To pursue its goal, the Fund invests in
securities that are diversified with regard to issues and industries. In
selecting securities, the Fund is not limited to any particular style of
investing and may invest in stocks considered to be "growth" stocks as well as
stocks considered to be "value" stocks. The Fund may invest in well-established
or developing companies, both large and small.

The Fund normally will invest substantially all of its assets in equity-type
securities, including common stocks, warrants, preferred stocks and debt
securities convertible into common stock and eligible real estate securities.
The Fund may invest up to 25% of its assets in foreign securities (not including
its investments in ADRs).

Principal Risks:

. Company Risk
. Derivatives Risk
. Investment Management Risk
. Market Risk

6
<PAGE>

[BAR CHART APPEARS HERE]

During the period shown above the highest quarterly return was 21.48% for the
quarter ended 12/31/98 and the lowest was 15.70% for the quarter ended 8/31/98.

PERFORMANCE TABLE

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Average Annual Total
Returns (for the periods Past Past Past
ending December 31, 1998) One Year 5 Years 10 Years
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fund Shares 19.32% 19.01% 16.98%
- -------------------------------------------------------------------------------------------------
S&P 500 Index* 28.58% 24.06% 19.20%
- -------------------------------------------------------------------------------------------------
</TABLE>

* The S&P 500 Index(R), reflecting reinvestment of dividends, is an unmanaged
index of 500 leading stocks. S&P 500(R) Index is a registered trademark of
Standard & Poor's Corporation.

EQUITY INDEX FUND
Sub-Adviser: Allmerica Asset Management, Inc.

Investment Objective: The Fund seeks to achieve investment results that
correspond to the aggregate price and yield performance of a representative
selection of common stocks that are publicly traded in the United States.

Principal Investment Strategies: The Fund tries to achieve its objective by
attempting to replicate the aggregate price and yield performance of the S&P 500
Index. Because of its policy of tracking the S&P 500 Index, the Fund does not
follow traditional methods of active investment management, which involve buying
and selling securities based upon analysis of economic and market factors. The
method used to select investments for the Fund involves investing in common
stocks in approximately the order of their weightings in the S&P 500 Index.
Under normal circumstances, the Fund will hold approximately 500 different
stocks included in the S&P 500 Index. The Fund will incur expenses that are not
reflected in the performance results of the S&P 500 Index. Therefore, the
return of the Fund may be lower than the return of the S&P 500 Index. These
factors, among others, may result in "tracking error", which is a measure of the
degree to which the Fund's results differ from the results of the S&P 500 Index.

7
<PAGE>

Principal Risks:

. Company Risk
. Derivatives Risk
. Market Risk

[BAR CHART APPEARS HERE]

During the period shown above the highest quarterly return was 22.00% for the
quarter ended 11/30/98 and the lowest was (11.93)% for the quarter ended
08/31/98.

PERFORMANCE TABLE

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Average Annual Total
Returns (for the periods Past Past Life of
ending December 31, 1998) One Year 5 Years Fund
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fund Shares 28.33% 23.39% 20.69%
- -------------------------------------------------------------------------------------------------
S&P 500(R) Index* 28.58% 24.06% 21.37%
- -------------------------------------------------------------------------------------------------
</TABLE>

* The S&P 500(R) Index, reflecting reinvestment of dividends, is an unmanaged
index of 500 leading stocks. S&P 500(R) Index is a registered trademark of
Standard & Poor's Corporation.

INVESTMENT GRADE INCOME FUND
SUB-ADVISER: ALLMERICA ASSET MANAGEMENT, INC.

Investment Objective: The Fund seeks as high a level of total return, which
includes capital appreciation as well as income, as is consistent with prudent
investment management.

8
<PAGE>

guaranteed by the U.S. Government, its agencies or instrumentalities, or money
market instruments, including commercial paper, bankers acceptances and
negotiable certificates of deposit. The Fund also may invest in mortgage-backed
and asset-backed securities. The Fund may invest up to 25% of its assets in
foreign securities (not including its investments in ADRs) and up to 25% of its
assets in debt obligations of supranational entities.

The Fund invests in investment grade securities rated in the four highest grades
by Moody's or Standard and Poor's or unrated but determined by the Sub-Adviser
to be of comparable quality. For more information about rating categories, see
the Appendix to the SAI. The Fund may invest in securities with relatively long
maturities as well as securities with shorter maturities.

The Sub-Adviser actively manages the portfolio with a view to producing a high
level of total return for the Fund while avoiding undue risks to capital. The
Sub-Adviser attempts to anticipate events leading to price or ratings changes
through using in depth fundamental credit research.

Principal Risks:

. Credit Risk
. Interest Rate Risk
. Investment Management Risk
. Liquidity Risk
. Market Risk
. Prepayment Risk

YEARLY PERFORMANCE

[BAR CHART APPEARS HERE]
<TABLE>

During the period shown above the highest quarterly return was 7.99% for the
quarter ended 07/31/89 and the lowest was (4.88)% for the quarter ended
04/30/94.

9
<PAGE>

PERFORMANCE TABLE

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Average Annual Total
Returns (for the periods Past Past Past
ending December 31, 1998) One Year 5 Years 10 Years
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fund Shares 7.97% 6.95% 9.17%
- -------------------------------------------------------------------------------------------------
Lehman Brothers 8.67% 7.27% 9.26%
Aggregate Bond Index
- -------------------------------------------------------------------------------------------------
</TABLE>

GOVERNMENT BOND FUND
Sub-Adviser: Allmerica Asset Management, Inc.

Investment Objective: The Fund seeks high income, preservation of capital, and
maintenance of liquidity primarily through investments in debt instruments
issued or guaranteed by the U.S. Government or its agencies or instrumentalities
("U.S. Government securities") and in related options, futures, and repurchase
agreements.

Under normal conditions, at least 80% of the Fund's assets will be invested in
U.S. Government securities.

Principal Investment Objectives: To pursue its objective, the Fund invests in
U.S. Government securities, such as Treasury bills, notes, and bonds, which may
differ only in their interest rates, maturities and times of issuance. The Fund
also may invest in mortgage-backed government securities, other instruments
secured by U.S. Government securities, asset-backed securities and separately-
traded principal and interest components of U.S. Treasury securities. The Fund
may invest up to 25% of its assets in debt obligations of supranational
entities.

The Sub-Adviser selects securities for the portfolio with a view to producing a
high level of current income while avoiding undue risks to capital. The Fund
may invest in securities with relatively long maturities as well as securities
with shorter maturities.

Principal Risks:

. Credit Risk
. Interest Rate Risk
. Investment Management Risk
. Market Risk
. Prepayment Risk

10
<PAGE>

YEARLY PERFORMANCE

[BAR CHART APPEARS HERE]
<TABLE>
<S> <C>
1992 6.59%
1993 7.51%
1994 -0.88%
1995 13.06%
1996 3.51%
1997 7.08%
1998 7.67%
</TABLE>

During the period shown above the highest quarterly return was 5.48% for the
quarter ended 07/31/92 and the lowest was (2.74)% for the quarter ended
04/30/94.

PERFORMANCE TABLE

<TABLE>
<CAPTION>
--------------------------------------------------------------------
Average Annual Total Returns Past Past Life of
(for the periods ending One Year Five Years Fund
December 31, 1998)
--------------------------------------------------------------------
<S> <C> <C> <C>
Fund Shares 7.67% 5.99% 7.00%
--------------------------------------------------------------------
Lehman Brothers Intermediate 8.49% 6.45% 7.38%
Government Bond Index*
--------------------------------------------------------------------
</TABLE>

* The Lehman Brothers Intermediate Government Bond Index(R) is an unmanaged
index of U.S. Government and Agency bonds with remaining maturities of one to
ten years.

MONEY MARKET FUND
Sub-Adviser: Allmerica Asset Management, Inc.

Investment Objective: The Fund seeks to obtain maximum current income
consistent with preservation of capital and liquidity.

11
<PAGE>

invest up to 25% of its assets in U.S. dollar denominated foreign securities
(not including its investments in ADRs).

Principal Risks:
. Credit Risk
. Interest Rate Risk
. Investment Management Risk
. Market Risk

YEARLY PERFORMANCE

[BAR CHART APPEARS HERE]
<TABLE>
<S> <C>
1989 9.07%
1990 8.17%
1991 6.22%
1992 3.78%
1993 3.00%
1994 3.93%
1995 5.84%
1996 5.36%
1997 5.47%
1998 5.51%
</TABLE>

During the period shown above the highest quarterly return was 9.44% for the
quarter ended 06/30/89 and the lowest was 2.91% for the quarter ended 07/31/93.

12
<PAGE>

PERFORMANCE TABLE

<TABLE>
<CAPTION>
-------------------------------------------------------------
Average Annual Total
Returns (for the periods Past Past Past
ending December 31, 1998) One Year 5 Years 10 Years
-------------------------------------------------------------
<S> <C> <C> <C>
Fund Shares 5.51% 5.22% 5.62%
-------------------------------------------------------------
IBC/Donoghue First Tier 4.96% 4.80% 5.22%
Money Market Index*
-------------------------------------------------------------
</TABLE>

EXPENSE SUMMARY

Fees and Expenses of the Funds
- ------------------------------

(1) Until further notice, Allmerica Financial Investment Management Services,
Inc. (the "Manager") has declared a voluntary expense limitation of 1.35%
of average net assets for the Select Aggressive Growth Fund, 1.50% for the
Select International Equity Fund, 1.20% for the Growth Fund, 1.10% for the
Investment Grade Income Fund and Government Bond Fund, and 0.60% for the
Equity Index Fund and Money Market Fund. The total operating expenses of
these Funds of the Trust were less than their respective expense
limitations throughout 1998.

13
<PAGE>

would have been 0.92% for the Select Aggressive Growth Fund, 1.01% for the
Select International Equity Fund, and 0.46% for the Growth Fund,.

Example
- -------

This Example is intended to help you compare the cost of investing in a Fund
with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in a Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment earns a 5% return each year and that
the Fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Select Aggressive Growth Fund $ 95 $297 $515 $1,143
Select International Equity Fund $102 $318 $552 $1,223
Growth Fund $ 49 $154 $268 $ 602
Equity Index Fund $ 36 $113 $197 $ 445
Investment Grade Income Fund $ 52 $163 $284 $ 638
Government Bond Fund $ 64 $200 $349 $ 781
Money Market Fund $ 32 $101 $176 $ 397
</TABLE>

DESCRIPTION OF PRINCIPAL INVESTMENT RISKS

The following is a summary of the principal risks of investing in a Fund and the
factors likely to cause the value of your investment in the Fund to decline.
The principal risks applicable to each Fund are identified under "Fund
Summaries". There are also many factors that could cause the value of your
investment in a Fund to decline which are not described here. It is important
to remember that there is no guarantee that the Funds will achieve their
investment objective, and an investor in any of the Funds could lose money.

COMPANY RISK

A Fund's equity and fixed income investments in a company often fluctuate based
on:

. the firm's actual and anticipated earnings,
. changes in management, product offerings and overall financial strength
and
. the potential for takeovers and acquisitions.

This is due to the fact that prices of securities react to the fiscal and
business conditions of the company that issued the securities. Factors
affecting a company's particular industry, such as increased production costs,
also may affect the value of its securities.

14
<PAGE>

CREDIT RISK

Credit risk is the risk that the issuer of a fixed income security will not be
able to pay principal and interest when due. There are different levels of
credit risk. Funds that invest in lower-rated securities have higher levels of
credit risk. Lower-rated or unrated securities of equivalent quality, generally
known as junk bonds, have very high levels of credit risk. Junk bonds are
considered to be speculative in their capacity to pay interest and repay
principal. The price of a fixed income security can be expected to fall if the
issuer defaults on its obligation to pay principal or interest, the rating
agencies downgrade the issuer's credit rating or there is negative news that
affects the market's perception of the issuer's credit risk.

CURRENCY RISK

DERIVATIVES RISK

15
<PAGE>

FOREIGN INVESTMENT RISK

INTEREST RATE RISK

LIQUIDITY RISK

INVESTMENT MANAGEMENT RISK

Investment management risk is the risk that a Fund does not achieve its
investment objective, even though the Sub-Adviser uses various investment
strategies and techniques.

16
<PAGE>

MARKET RISK

This is the risk that the price of a security held by a Fund will fall due to
changing economic, political or market conditions or to factors affecting
investor psychology.

PREPAYMENT RISK

While mortgage-backed securities may have a stated maturity, their expected
maturities may vary when interest rates rise or fall. When interest rates fall,
homeowners are more likely to prepay their mortgage loans which may result in an
unforeseen loss of interest income to a Fund. Also, because prepayments
increase when interest rates fall, the prices of mortgage-backed securities does
not increase as much as other fixed income securities when interest rates fall.

OTHER INVESTMENT STRATEGIES

17
<PAGE>

from either goods or services produced or sold in the country or (ii) at least
50% of the company's assets are situated in the country. A Fund may invest in
foreign securities either directly or indirectly through the use of depositary
receipts, such as ADRs. Depositary receipts are generally issued by banks or
trust companies and evidence ownership of underlying foreign securities. An ADR
may be sponsored by the issuer of the underlying foreign security or it may be
issued in unsponsored form. The holder of a sponsored ADR is likely to receive
more frequent and extensive financial disclosure concerning the foreign issuer
than the holder of an unsponsored ADR and generally will bear lower transaction
charges. The Select International Equity Fund may also purchase foreign
securities through European Depositary Receipts and Global Depositary Receipts.

Lending of Securities. (APPLICABLE TO ALL FUNDS) To realize additional income,
- ---------------------
the Funds may lend portfolio securities to broker-dealer or financial
institutions in an amount up to 33-1/3% of a Fund's total assets. While any
such loan is outstanding, a Fund will continue to receive amounts equal to the
interest or dividends paid by the issuer on the securities, as well as interest
(less any rebates to be paid to the borrower) on the investment of the
collateral or a fee from the borrower. Each Fund will have the right to call
each loan and obtain the securities. Lending portfolio securities involves
possible delays in receiving additional collateral or in the recovery of the
securities or possible loss of rights in the collateral.

Restricted Securities. (APPLICABLE TO ALL FUNDS) The Funds may purchase fixed-
- ---------------------
income securities that are not registered under Federal securities law
("restricted securities"), but can be offered and sold to certain "qualified
institutional buyers". Each Fund will not invest more than 15% (10% for the
Money Market Fund) of its net assets in restricted securities (and securities
deemed to be illiquid). These limits do not apply if the Board of Trustees
determines that the restricted securities are liquid. The Board of Trustees has
adopted guidelines and delegated to the Manager the daily function of
determining and monitoring liquidity of restricted securities. The Board,
however, retains sufficient oversight and is ultimately responsible for the
determinations. This investment practice could increase the level of
illiquidity in a Fund if buyers lose interest in restricted securities. As a
result, a Fund might not be able to sell these securities when its Sub-Adviser
wants to sell, or might have to sell them at less than fair value. In addition,
market quotations for these securities are less readily available.

Temporary Defensive Strategies. At times a Sub-Adviser may determine that
- ------------------------------
market conditions make it desirable temporarily to suspend a Fund's normal
investment activities. This is when the Fund may temporarily invest in a
variety of lower-risk securities, such as U.S. Government and other high quality
bonds and short-term debt obligations. Such strategies attempt to reduce
changes in the value of the Fund's shares. The Fund may not achieve its
investment objective while these strategies are in effect.

18
<PAGE>

MANAGEMENT OF THE FUNDS

The Trust is governed by a Board of Trustees. Allmerica Financial Investment
Management Services, Inc. is the investment Manager of the Trust responsible for
managing the Trust's day-to-day business affairs. The Manager is located at 440
Lincoln Street, Worcester, MA 01653. The Manager and its predecessor,
Allmerica Investment Management Company, Inc., have been managing mutual funds
since 1985. The Manager currently serves as investment manager to one other
mutual fund. Sub-Advisers have been hired to manage the investments of the
Funds. The Trust and Manager have obtained an order of exemption from the SEC
that permits the Manager to enter into and materially amend sub-advisory
agreements with non-affiliated Sub-Advisers without obtaining shareholder
approval. The Manager has ultimate responsibility to oversee Sub-Advisers. The
Manager has the ability, subject to approval of the Trustees, to hire and
terminate Sub-Advisers and to change materially the terms of the Sub-Adviser
Agreements, including the compensation paid to the Sub-Advisers, without the
approval of the shareholders of the Funds. The Sub-Advisers have been selected
by the Manager and Trustees with the help of BARRA RogersCasey, Inc., a pension
consulting firm. The fees earned by each Sub-Adviser and BARRA RogersCasey are
paid by the Manager. The performance by the Sub-Advisers is reviewed quarterly
by a committee of the Board of Trustees, with assistance from BARRA RogersCasey.

The following table provides information about each Fund's Sub-Adviser:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
FUND NAME,
SUB-ADVISER NAME AND ADDRESS EXPERIENCE
--------------------------------------------------------------------------------------------------------
<S> <C>
Select Aggressive Growth Fund Has over $31 billion assets under management as
-----------------------------
Nicholas-Applegate Capital Management, L.P. of January 21, 1999. Founded in 1984. Clients
600 West Broadway, Suite 2900 include employee benefit and retirement plans,
San Diego, CA 92101 foundations, investment companies and
individuals.
--------------------------------------------------------------------------------------------------------
Select International Equity Fund Managed over $38 billion in global securities as
--------------------------------
Bank of Ireland Asset Management (U.S.) Ltd. of December 31, 1998. Founded in 1966.
26 Fitzwilliam Place, Dublin 2, Ireland and Provides international investment management
20 Horseneck Lane services.
Greenwich, CT 06830
---------------------------------------------------------------------------------------------------------
Growth Fund Organized in 1969. Provides investment advisory
-----------
Miller Anderson & Sherrerd, LLP services to employee benefit plans, endowment
One Tower Bridge funds, foundations and other institutional
West Conshohocken, PA 19428 investors. $69 billion assets under management
as of December 31, 1998.
--------------------------------------------------------------------------------------------------------
</TABLE>

19
<PAGE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
FUND NAME,
SUB-ADVISER NAME AND ADDRESS EXPERIENCE
-------------------------------------------------------------------------------------------------
<S> <C>
Equity Index Fund Incorporated in 1993. $13.2 billion assets under
-----------------
Allmerica Asset Management, Inc. management as of December 31, 1998. Serves as
440 Lincoln Street investment adviser to investment companies and
Worcester, MA 01653 affiliated insurance company accounts.
-------------------------------------------------------------------------------------------------
Investment Grade Income Fund See Equity Index Fund above
----------------------------
Allmerica Asset Management, Inc.
440 Lincoln Street
Worcester, MA 01653
-------------------------------------------------------------------------------------------------
Government Bond Fund See Equity Index Fund above
--------------------
Allmerica Asset Management, Inc.
440 Lincoln Street
Worcester, MA 01653
-------------------------------------------------------------------------------------------------
Money Market Fund See Equity Index Fund above
-----------------
Allmerica Asset Management, Inc.
440 Lincoln Street
Worcester, MA 01653
-------------------------------------------------------------------------------------------------
</TABLE>

For a sample listing of certain of the Sub-Advisers' clients, see "Investment
Management and Other Services" in the SAI.

The following individuals or groups of individuals are primarily responsible for
the day-to-day management of the Funds' portfolios:

<S> <C> <C> <C>
Select Aggressive Growth Fund Lawrence S. Speidell, Partner 1994 Present Director of Global/Systematic Portfolio
- -----------------------------
Nicholas-Applegate Capital Management at NACM. Prior to joining
Management, L.P. ("NACM") NACM, he spent ten years with
Batterymarch Financial Management.

John J. Kane, Partner 1994 - Present Senior Portfolio Manager for the U.S.
Systematic portfolios at NACM. Prior
to joining NACM in 1994, he was
employed by ARCO Investment Management
Company and General Electric.

Mark W. Stuckelman, Portfolio 1995 Present Portfolio Manager for the U.S. Systematic
Manager portfolios at NACM. Prior to joining
NACM, he was employed for five years
with Wells Fargo Bank, Fidelity
Management Trust Co., and BARRA, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

20
<PAGE>

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
FUND NAME AND SUB-ADVISER NAME AND TITLE OF SERVICE WITH BUSINESS EXPERIENCE
NAME PORTFOLIO MANAGER(S) SUB-ADVISER FOR PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Select International Equity Christopher Reilly, Chief Investment 1980 - Present Since 1985, he has had overall responsibility
- ---------------------------
Fund Officer for asset management. He previously worked in
- ----
Bank of Ireland Asset the United Kingdom in stockbrokering and
Management (U.S.) Limited investment management.
("BIAM")

Denis Donovan, Director-Portfolio 1985 - Present Prior to joining BIAM , he spent more than 13
Manager years in the money market and foreign exchange
operations of the Central Bank of Ireland. At
present, he has overall responsibility for the
portfolio management function for all of
BIAM's client base.

Peter Wood 1985 - Present Prior to 1985, he spent five years with
another leading investment management firm. He
is now responsible for portfolio construction
at BIAM.

Jane Neill, Senior Equity Analyst 1994 - Present Previously, she was Chief Investment Officer
with another leading Irish investment
management firm.

- ------------------------------------------------------------------------------------------------------------------------------------
Growth Fund Gary G. Schlarbaum, CFA and Managing 1987 - Present He has served on a committee of fund managers
- -----------
Miller Anderson & Sherrerd, Director since 1993. Prior to 1987, Mr. Schlarbaum was
LLP ("MAS") employed by First Chicago Investment Advisors
from 1984 - 1987.

Nicholas Kovich, CFA and Managing 1988 - Present He has served on the fund managers committee
Director since 1988. Prior to MAS, Mr. Kovich was
employed by Waddell & Reed Asset Management
Company from 1982 1988.

Robert J. Marcin, CFA and Managing 1988 - Present Prior to joining MAS in 1988, Mr. Marcin was
Director an Account Executive at Smith Barney Harris
Upham and Company, Inc.

Brian Kramp, CFA and Vice President 1997 - Present Mr. Kramp was employed as an analyst and
portfolio manager by Meridian Investment
Company from 1985 1997.

James J. Jolinger, Principal 1994 - Present He served on the fund managers committee since
1997. Prior to 1994, Mr. Jolinger was employed
by Oppenheimer Capital as an Equity Analyst
from 1987 to 1994.

Arden C. Armstrong, CFA and 1986 - Present Prior to joining MAS, Ms. Armstrong was
Managing Director employed by Evans Economics, Inc.

- ------------------------------------------------------------------------------------------------------------------------------------
Investment Grade Income Fund Lisa M. Coleman, CFA and Vice 1994 - Present She was a Deputy Manager/Portfolio Manager in
- ----------------------------
Allmerica Asset Management, President the global fixed income area for Brown
Inc. ("AAM") Brothers Harriman & Company in New York prior
to joining AAM.

- ------------------------------------------------------------------------------------------------------------------------------------
Government Bond Fund Richard J. Litchfield, CFA and Vice 1995 - Present He was a mortgage-backed securities analyst
- --------------------
Allmerica Asset Management, President and trader at Keystone Investments, Inc. prior
Inc. ("AAM") to joining AAM.

- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

21
<PAGE>

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
FUND NAME AND SUB-ADVISER NAME AND TITLE OF SERVICE WITH BUSINESS EXPERIENCE
NAME PORTFOLIO MANAGER(S) SUB-ADVISER FOR PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Equity Index Fund and Money John C. Donohue, Vice President 1995 - Present He was a portfolio manager at CS First Boston
- ---------------------------
Market Fund Investment Management prior to joining AAM.
- -----------
Allmerica Asset Management,
Inc. ("AAM")
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

For the fiscal year ended December 31, 1998, the Funds paid the Manager the fees
shown in the table below:

<TABLE>
<CAPTION>
FEE (AS A PERCENTAGE OF
FUND AVERAGE NET ASSETS)
---- -----------------------
<S> <C>
Select Aggressive Growth Fund............... 0.88%
Select International Equity Fund............ 0.90%
Growth Fund................................. 0.44%
Equity Index Fund........................... 0.29%
Investment Grade Income Fund................ 0.43%
Government Bond Fund........................ 0.50%
Money Market Fund........................... 0.26%
</TABLE>

For fiscal year ended December 31, 1998, the Manager paid each Sub-Adviser
aggregate fees as set forth below:

<TABLE>
<CAPTION>
FEE (AS A PERCENTAGE OF
SUB-ADVISER AVERAGE NET ASSETS)
----------- -----------------------
<S> <C>
Nicholas-Applegate Capital Management, L.P.
(Select Aggressive Growth Fund)..................... 0.51%
Bank of Ireland Asset Management (U.S.) Limited
(Select International Equity Fund).................. 0.33%
Miller Anderson & Sherrerd, LLP
(Growth Fund)....................................... 0.21%
Allmerica Asset Management, Inc.
(Equity Index Fund)................................. 0.10%
Allmerica Asset Management, Inc.
(Investment Grade Income Fund)...................... 0.20%
Allmerica Asset Management, Inc.
(Government Bond Fund).............................. 0.20%
Allmerica Asset Management, Inc.
(Money Market Fund)................................. 0.10%
</TABLE>

__________________________________________

PRICING OF FUND SHARES

22
<PAGE>

normally 4:00 p.m. Eastern Time. Orders for the purchase or redemption of shares
are filled at the next NAV computed after an order is received by the Fund. The
Funds do not accept orders or compute their NAV's on days when the Exchange is
closed.

PURCHASE AND REDEMPTION OF SHARES

Shares of the Funds currently are purchased only by Separate Accounts which are
the funding mechanisms for variable annuity contracts and variable life
insurance policies. The Distributor, Allmerica Investments, Inc., at its
expense, may provide promotional incentives to dealers who sell variable annuity
contracts which invest in the Funds. The Trust has obtained an exemptive order
from the Securities and Exchange Commission to permit Fund shares to be sold to
variable annuity and variable life insurance separate accounts of both
affiliated and unaffiliated life insurance companies and certain qualified
pension and retirement plans. Material irreconcilable conflicts may arise among
various insurance policy owners and plan participants. The Trustees will
monitor events to identify any material conflicts and determine if any action
should be taken to resolve such conflict.

23
<PAGE>

DISTRIBUTIONS AND TAXES

Distributions
- -------------

Each Fund pays out substantially all of its net investment income and net
capital gains to shareholders each year. Net investment income is paid
quarterly in the case of the Growth Fund, Equity Index Fund, Investment Grade
Income Fund and Government Bond Fund; annually in the case of the Select
Aggressive Growth Fund and Select International Equity Fund; and daily in the
case of the Money Market Fund. Distributions of net capital gains for the year,
if any, are made annually. All dividends and capital gain distributions are
applied to purchase additional Fund shares at net asset value as of the payment
date. Fund shares are held by the Separate Accounts and any distributions are
reinvested automatically by the Separate Accounts.

Taxes
- -----

YEAR 2000

24
<PAGE>

December 31, 1999. However, there can be no guarantee that the Trust's
operations will not be adversely affected by non-compliant systems of its
service providers or of other third parties which interact with such service
providers. The Year 2000 problem could also have an adverse effect on issuers
whose securities are owned by the Funds, potentially decreasing the value of
such securities.

- ----------------------------
The conversion of certain European currencies to the "euro" may present
additional risks to those Funds exposed to such currencies.

FINANCIAL HIGHLIGHTS

[Sample format]
The Fund
- ---------------

Net Asset Value, Beginning of Period
Income From Investment Operations
Net Investment Income
Net Gains or Losses on Securities (both realized and unrealized)
Total From Investment Operations
Less Distributions
Dividends (from net investment income)
Distributions (from capital gains)
Returns of Capital
Total Distributions

Net Asset Value, End of Period

Total Return
- ------------

................................................................................

Ratios/Supplemental Data
- ------------------------

Net Assets, End of Period
Ratios of Expenses to Average Net Assets
Ratios of Net Income to Average Net Assets
Portfolio Turnover Rate

25
<PAGE>

[Back Cover]

ALLMERICA INVESTMENT TRUST

Select Aggressive Growth Fund
Select International Equity Fund
Growth Fund
Equity Index Fund
Investment Grade Income Fund
Government Bond Fund
Money Market Fund

440 Lincoln Street
Worcester, Massachusetts 01653
(508) 855-1000

26
<PAGE>

INVESTMENT TECHNIQUES AND STRATEGIES
- ------------------------------------

In managing its portfolios of investments, the Trust may make use of the
following investment techniques and strategies:

SYMBOLS
- -------
. Permitted
- --- Not Permitted

<TABLE>
<CAPTION>
SELECT SELECT INVESTMENT
AGGRESSIVE INTERNATIONAL EQUITY GRADE GOVERNMENT MONEY
INVESTMENT TECHNIQUE/STRATEGY GROWTH FUND EQUITY FUND GROWTH FUND INDEX FUND INCOME FUND BOND FUND MARKET FUND
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Asset-Backed Securities ---- ---- . ---- . . .
Financial Futures Contracts
and Related Options . . . . . . ----
Foreign Securities . . . . . ---- .
Forward Commitments ---- ---- ---- ---- . . .
Forward Contracts on Foreign Currencies ---- . ---- ---- ---- ---- ----
High Yield Securities ---- ---- ---- ---- ---- ---- ----
Investments in Money Market Securities . . . . . . .
Mortgage-Backed Securities ---- ---- ---- ---- . . ----
Purchasing Options . . . . . . ----
Repurchase Agreements . . . . . . .
Restricted Securities . . . . . . .
Reverse Repurchase Agreements ---- ---- ---- ---- ---- ---- ----
Securities Lending . . . . . . .
Stand-By Commitments ---- ---- ---- ---- . . .
Stripped Mortgage-Backed Securities ---- ---- ---- ---- . . ----
Swap and Swap-Related Products ---- ---- ---- ---- ---- ---- ----
When-Issued Securities . . . . . . .
Writing Covered Options . . . . . . ----
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

ALLMERICA INVESTMENT TRUST

PROSPECTUS DATED: MAY 1, 1999

This Prospectus describes the following 9 investment Funds of the Trust which
serve as the underlying investments for insurance related accounts.

This Prospectus explains what you should know about each of the Funds before you
invest. Please read it carefully before you invest.

A particular Fund may not be available under the variable annuity or variable
life insurance policy which you have chosen. The Prospectus of the specific
insurance product you have chosen will indicate which Funds are available and
should be read in conjunction with this Prospectus. Inclusion in this Prospectus
of a Fund which is not available under your policy is not to be considered a
solicitation.

440 LINCOLN STREET
WORCESTER, MASSACHUSETTS 01653
(508) 855-1000
<PAGE>

TABLE OF CONTENTS

<TABLE>
<S> <C>
FUND SUMMARIES..................................................... 3
Objectives, Strategies and Risks................................. 3
Select Emerging Markets Fund.................................. 3
Select Aggressive Growth Fund................................. 4
Select Capital Appreciation Fund.............................. 5
Select Value Opportunity Fund................................. 7
Select International Equity Fund.............................. 8
Select Growth Fund............................................ 9
Select Strategic Growth Fund.................................. 11
Select Growth and Income Fund................................. 11
Select Income Fund............................................ 13

EXPENSE SUMMARY.................................................... 14

DESCRIPTION OF PRINCIPAL INVESTMENT RISKS.......................... 16

OTHER INVESTMENT STRATEGIES........................................ 19

MANAGEMENT OF THE FUNDS............................................ 21

PRICING OF FUND SHARES............................................. 27

PURCHASE AND REDEMPTION OF SHARES.................................. 27

DISTRIBUTIONS AND TAXES............................................ 28

YEAR 2000.......................................................... 29

FINANCIAL HIGHLIGHTS............................................... 29
</TABLE>

2
<PAGE>

FUND SUMMARIES

Allmerica Investment Trust provides a broad range of investment options through
9 separate investment portfolios, or Funds. Shares of the Funds are sold
exclusively to variable annuity and variable life insurance Separate Accounts
and qualified pension and retirement plans.

The following summaries describe each Fund's investment objective and principal
investment strategies, identify the principal investment risks of investing in
the Fund, and provides performance charts for the Fund. Note that any percentage
limitations listed under a Fund's principal investment strategies apply at the
time of investment. The principal risks are discussed in more detail under
"Description of Principal Investment Risks". The bar charts show how the
investment returns of the shares of a Fund have varied in the past ten years (or
for the life of the Fund if less than 10 years). The table following each bar
chart shows how the Fund's average annual return for the last one, five and ten
years (or for the life of the Fund, if shorter) compare to those of a broad-
based securities market index. PAST PERFORMANCE DOES NOT NECESSARILY INDICATE
HOW THE FUND WILL PERFORM IN THE FUTURE. The bar charts and tables give some
indication of the risks of investing in each Fund by showing changes in the
Fund's performance. A bar chart and table are not included for two new Funds,
the Select Emerging Markets Fund and the Select Strategic Growth Fund, since as
of December 31, 1998 they had not yet had a full calendar year of investment
returns.

OBJECTIVES, STRATEGIES AND RISKS
- --------------------------------

SELECT EMERGING MARKETS FUND

Sub-Adviser: Schroder Capital Management International Inc.

Investment Objective: The Fund seeks long-term growth of capital by investing in
the world's emerging markets.

Principal Investment Strategies: While its investments are not limited to any
specific region of the world, the Fund normally invests at least 65% of its
assets in companies located or primarily operating in countries with emerging
markets. The Fund usually has investments in at least five developing countries.
Before the Fund

3
<PAGE>

invests in a country, the Sub-Adviser considers various factors such as that
country's political stability and economic prospects. In selecting securities
for the Fund, the Sub-Adviser focuses on the long-term growth potential of the
securities.

Principal Risks:

. Company Risk
. Credit Risk
. Currency Risk
. Derivatives Risk
. Emerging Markets Risk
. Foreign Investment Risk
. Investment Management Risk
. Liquidity Risk
. Market Risk

SELECT AGGRESSIVE GROWTH FUND

Sub-Adviser: Nicholas-Applegate Capital Management, L.P.

Investment Objective: The Fund seeks above-average capital appreciation by
investing primarily in common stocks of companies which are believed to have
significant potential for capital appreciation.

Principal Risks:

. Company Risk

4
<PAGE>

. Derivatives Risk
. Investment Management Risk
. Liquidity Risk
. Market Risk

YEARLY PERFORMANCE

[BAR CHART APPEARS HERE]
<TABLE>
<S> <C>
1993 19.51%
1994 -2.31%
1995 32.28%
1996 18.55%
1997 18.71%
1998 10.56%
</TABLE>

During the period shown above the highest quarterly return was 30.61% for the
quarter ended 06/30/97 and the lowest was (24.40)% for the quarter ended
08/31/98.

PERFORMANCE TABLE

<TABLE>
<CAPTION>
----------------------------------------------------------------------
Average Annual Total
Returns (for the periods Past Past Life
ending December 31, 1998) One Year 5 Years Of Fund
----------------------------------------------------------------------
<S> <C> <C> <C>
Fund Shares 10.56% 14.99% 18.11%
----------------------------------------------------------------------
Russell 2500 Index* 0.38% 14.13% 16.27%
----------------------------------------------------------------------
</TABLE>

* The Russell 2500 Index is an unmanaged composite of 2,500 small-to-mid
capitalization stocks.

SELECT CAPITAL APPRECIATION FUND

Sub-Adviser: T. Rowe Price Associates, Inc.

Investment Objective: The Fund seeks long-term growth of capital. Realization of
income is not a significant investment consideration and any income realized on
the Fund's investments will be incidental to its primary objective.

5
<PAGE>

Mid Cap 400 Index (as of December 31, 1998, $240 million to $11.6 billion market
capitalization). The Fund may also invest in larger firms and firms with a
market capitalization below $240 million.

Principal Risks:

. Company Risk
. Credit Risk
. Currency Risk
. Derivatives Risk
. Foreign Investment Risk
. Investment Management Risk
. Liquidity Risk
. Market Risk

YEARLY PERFORMANCE

[BAR CHART APPEARS HERE]
<TABLE>
<S> <C>
1996 8.80%
1997 14.28%
1998 13.88%
</TABLE>

During the period shown above the highest quarterly return was 27.90% for the
quarter ended 12/31/98 and the lowest was (19.81)% for the quarter ended
08/31/98.

T. Rowe Price Associates, Inc. became Sub-Adviser of the Fund on April 1, 1998.
Performance before that date is based on the performance of the Fund's previous
Sub-Adviser.

PERFORMANCE TABLE
<TABLE>
<CAPTION>
---------------------------------------------------------
Average Annual Total
Returns (for the periods Past Life
ending December 31, 1998) One Year Of Fund
---------------------------------------------------------
<S> <C> <C>
Fund Shares 13.88% 20.37%
---------------------------------------------------------
Russell 2500 Index* 0.38% 17.50%
---------------------------------------------------------
</TABLE>

6
<PAGE>

* The Russell 2500 Index is a unmanaged composite of 2,500 small-to-mid
capitalization stocks.

SELECT VALUE OPPORTUNITY FUND

Sub-Adviser: Cramer Rosenthal McGlynn, LLC

Principal Risks:

. Company Risk
. Currency Risk
. Derivatives Risk
. Foreign Investment Risk
. Investment Management Risk
. Liquidity Risk
. Market Risk

7
<PAGE>

YEARLY PERFORMANCE

[BAR CHART APPEARS HERE]
<TABLE>
<S> <C>
1994 -6.51%
1995 17.60%
1996 28.53%
1997 24.85%
1998 4.87%
</TABLE>

Cramer Rosenthal McGlynn, LLC became Sub-Adviser of the Fund on January 1, 1997.
Performance before that date is based on the performance of the Fund's previous
Sub-Adviser.

PERFORMANCE TABLE

<TABLE>
<CAPTION>
----------------------------------------------------------------------
Average Annual Total
Returns (for the periods Past Past Life
ending December 31, 1998) One Year 5 Years Of Fund
----------------------------------------------------------------------
<S> <C> <C> <C>
Fund Shares 4.87% 13.09% 14.71%
----------------------------------------------------------------------
Russell 2500 Index* 0.38% 14.13% 15.09%
----------------------------------------------------------------------
</TABLE>

* The Russell 2500 Index is an unmanaged composite of 2,500 small-to-mid
capitalization stocks.

SELECT INTERNATIONAL EQUITY FUND

Sub-Adviser: Bank of Ireland Asset Management (U.S.) Limited

Investment Objective: The Fund seeks maximum long-term total return (capital
appreciation and income) primarily by investing in common stocks of established
non-U.S. companies.

8
<PAGE>

Principal Risks:

. Company Risk
. Currency Risk
. Derivatives Risk
. Foreign Investment Risk
. Investment Management Risk
. Market Risk

YEARLY PERFORMANCE

[BAR CHART APPEARS HERE]
<TABLE>
<S> <C>
1995 19.63%
1996 21.94%
1997 4.65%
1998 16.48%
</TABLE>

During the period shown above the highest quarterly return was 19.49% for the
quarter ended 12/31/98 and the lowest was (17.69)% for the quarter ended
09/30/98.

PERFORMANCE TABLE

<TABLE>
<CAPTION>
---------------------------------------------------------
Average Annual Total
Returns (for the periods Past Life
ending December 31, 1998) One Year Of Fund
---------------------------------------------------------
<S> <C> <C>
Fund Shares 16.48% 12.26%
---------------------------------------------------------
Russell 2500 Index* 20.33% 0.41%
---------------------------------------------------------
</TABLE>

SELECT GROWTH FUND

Sub-Adviser: Putnam Investment Management, Inc.

9
<PAGE>

companies, such as those included in the S&P 500 Index, although it can also
make investments in smaller growth companies.

Principal Risks:

. Company Risk
. Credit Risk
. Derivatives Risk
. Investment Management Risk
. Market Risk

YEARLY PERFORMANCE

[BAR CHART APPEARS HERE]
<TABLE>
<S> <C>
1993 0.84%
1994 -1.49%
1995 24.59%
1996 22.02%
1997 34.06%
1998 35.44%
</TABLE>

During the period shown above the highest quarterly return was 25.02% for the
quarter ended 12/31/98 and the lowest was (11.84)% for the quarter ended
09/30/98.

Putnam Investment Management, Inc. became Sub-Adviser of the Fund on July 1,
1996. Performance before that date is based on the performance of the Fund's
previous Sub-Adviser.

10
<PAGE>

PERFORMANCE TABLE

<TABLE>
<CAPTION>
---------------------------------------------------------------
Average Annual Total
Returns (for the periods Past Past Life
ending December 31, 1998) One Year 5 Years Of Fund
---------------------------------------------------------------
<S> <C> <C> <C>
Fund Shares 35.44% 22.15% 19.18%
---------------------------------------------------------------
S&P 500 Index* 28.58% 24.06% 21.53%
---------------------------------------------------------------
</TABLE>

* The S&P 500(R) Index, reflecting reinvestment of dividends, is an unmanaged
index of 500 leading stocks. S&P 500(R) Index is a registered trademark of
Standard & Poor's Corporation.

SELECT STRATEGIC GROWTH FUND

Sub-Adviser: Cambiar Investors, Inc.

Investment Objective: The Fund seeks long-term growth of capital by investing
primarily in common stocks of established companies.

Principal Risks:

. Company Risk
. Derivatives Risk
. Investment Management Risk
. Market Risk

SELECT GROWTH AND INCOME FUND

Sub-Adviser: J.P. Morgan Investment Management Inc.

11
<PAGE>

Principal Investment Strategies: The Fund invests in a broadly diversified
portfolio of equity securities, primarily the common stock of companies included
in the S&P 500 Index. The Fund's industry diversification and other risk
charateristics will be similar to those of the index. The Fund may invest in a
wide range of equity securities, consisting of common stocks, preferred stocks,
securities convertible into common and preferred stocks and warrants. The Fund
may purchase individual stocks not presently paying dividends if the Sub-Adviser
believes the overall portfolio is positioned to achieve its income objective.

The Fund may invest up to 35% of its assets in fixed-income securities,
including up to 15% in "junk bonds". However, the Fund's normal strategy is to
be nearly fully invested in equity securities. The Fund may also invest up to
25% of its assets in foreign securities (not including its investments in ADRs).

Principal Risks:
. Company Risk
. Derivatives Risk
. Investment Management Risk
. Market Risk

YEARLY PERFORMANCE

[BAR CHART APPEARS HERE]
<TABLE>
<S> <C>
1993 10.37%
1994 0.73%
1995 30.32%
1996 21.26%
1997 22.51%
1998 16.43%
</TABLE>

During the period shown above the highest quarterly return was 19.48% for the
quarter ended 11/30/98 and the lowest was (16.18)% for the quarter ended
08/31/98.

John A. Levin & Co., Inc. became Sub-Adviser of the Fund on September 1, 1994.
Performance before that date is based on the performance of the Fund's previous
Sub-Adviser. J.P. Morgan Investment Management Inc. replaced John A. Levin &
Co., Inc. as Sub-Adviser of the Fund on April 1, 1999.

12
<PAGE>

PERFORMANCE TABLE

<TABLE>
<CAPTION>
---------------------------------------------------------------
Average Annual Total
Returns (for the periods Past Past Life
ending December 31, 1998) One Year 5 Years Of Fund
---------------------------------------------------------------
<S> <C> <C> <C>
Fund Shares 16.43% 17.82% 15.53%
---------------------------------------------------------------
S&P 500 Index* 28.58% 24.06% 21.53%
---------------------------------------------------------------
</TABLE>

* The S&P 500 Index(R), reflecting reinvestment of dividends, is an unmanaged
index of 500 leading stocks. S&P 500(R) Index is a registered trademark of
Standard & Poor's Corporation.

SELECT INCOME FUND

Sub-Adviser: Standish, Ayer & Wood, Inc.

Investment Objective: The Fund seeks a high level of current income. The Fund
will invest primarily in investment grade, fixed-income securities.

Principal Investment Strategies: Examples of the types of securities in which
the Fund invests are corporate debt obligations such as bonds, notes and
debentures, and obligations convertible into common stock; commercial paper;
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities; and debt securities backed by various types of financial
assets. The Fund also may invest in mortgage-backed and asset-backed
securities. The Fund's investments in corporate debt securities are not limited
to any particular type of company or industry. The Fund may invest up to 25% of
its assets in foreign securities (not including its investments in ADRs), up to
35% of its assets in money market instruments and up to 25% in debt obligations
of supranational entities.

Principal Risks:
. Credit Risk
. Interest Rate Risk
. Investment Management Risk
. Liquidity Risk
. Market Risk
. Prepayment Risk

13
<PAGE>

YEARLY PERFORMANCE

[BAR CHART APPEARS HERE]

<TABLE>
<S> <C>
1993 10.95%

1994 -4.82%

1995 16.96%

1996 3.32%

1997 9.17%

1998 6.83%
</TABLE>

During the period shown above the highest quarterly return was 6.22% for the
quarter ended 02/28/93 and the lowest was (6.40)% for the quarter ended
04/30/94.

PERFORMANCE TABLE

<TABLE>
<CAPTION>
---------------------------------------------------------------
Average Annual Total
Returns (for the periods Past Past Life
ending December 31, 1998) One Year 5 Years Of Fund
---------------------------------------------------------------
<S> <C> <C> <C>
Fund Shares 6.83% 6.05% 6.56%
---------------------------------------------------------------
Lehman Brothers 8.67% 7.27% 7.51%
Aggregate Bond Index*
---------------------------------------------------------------
</TABLE>

EXPENSE SUMMARY

Fees and Expenses of the Funds
- ------------------------------

14
<PAGE>

<TABLE>
<CAPTION>
Annual Fund Operating Expenses Total Annual
Shareholder Fees (expenses deducted from Fund assets) Fund
(fees paid directly Management Distribution Other Operating
from your investment) Fees (12b-1) Fees Expenses Expenses
--------------------- ---------- ------------ -------- --------
<S> <C> <C> <C> <C> <C>
Select Emerging Markets Fund @ None 1.35%* None 1.19% 2.54%(1),(2)*
Select Aggressive Growth Fund None 0.88% None 0.07% 0.95%(1),(2)
Select Capital Appreciation Fund None 0.94% None 0.10% 1.04%(1),(2)
Select Value Opportunity Fund None 0.91%(1)* None 0.08% 0.99%(1),(2)*
Select International Equity Fund None 0.90% None 0.12% 1.02%(1),(2)
Select Growth Fund None 0.81%** None 0.05% 0.86%(1),(2)**
Select Strategic Growth Fund @ None 0.85%* None 0.81% 1.66%(1),(2)*
Select Growth and Income Fund None 0.68% None 0.05% 0.73%(1),(2)
Select Income Fund None 0.54% None 0.10% 0.64%(1)
</TABLE>

@ The Select Emerging Markets Fund and Select Strategic Growth Fund commenced
operations on February 20, 1998. Expenses shown are annualized.

* Amount does not reflect a voluntary expense limitation currently in effect
for the Select Emerging Markets Fund, Select Value Opportunity Fund, and
Select Strategic Growth Fund. For the year ended December 31, 1998, the
Management Fees and Total Annual Fund Operating Expenses were 1.00% and
2.19%, respectively, for Select Emerging Markets Fund, 0.90% and 0.98%,
respectively, for Select Value Opportunity Fund, and 0.39% and 1.20%,
respectively, for the Select Strategic Growth Fund after the effect of the
voluntary expense limitations.

(1) Until further notice, Allmerica Financial Investment Management Services,
Inc. (the "Manager") has declared a voluntary expense limitation of 1.35% of
average net assets for the Select Aggressive Growth Fund and Select Capital
Appreciation Fund, 1.25% for the Select Value Opportunity Fund, 1.50% for
the Select International Equity Fund, 1.20% for the Select Growth Fund,
1.10% for the Select Growth and Income Fund, and 1.00% for the Select Income
Fund. The total operating expenses of these Funds of the Trust were less
than their respective expense limitations throughout 1998.

Until further notice, the Manager has declared a voluntary expense
limitation of 1.20% of average daily net assets for the Select Strategic
Growth Fund. In addition, the Manager has agreed to voluntarily waive its
management fee to the extent that expenses of the Select Emerging Markets
Fund exceed 2.00% of the Fund's average daily net assets. The amount of such
waiver shall not exceed the net amount of management fees earned by the
Manager from the Fund after subtracting fees paid by the Manager to the
Fund's Sub-Adviser.

15
<PAGE>

the Select International Equity Fund, 0.84% for the Select Growth Fund,
1.14% for the Select Strategic Growth Fund, and 0.70% for the Select Growth
and Income Fund.

Example
- -------

This Example is intended to help you compare the cost of investing in a Fund
with the cost of investing in other mutual funds.

DESCRIPTION OF PRINCIPAL INVESTMENT RISKS

COMPANY RISK

A Fund's equity and fixed income investments in a company often fluctuate based
on:

. the firm's actual and anticipated earnings,

. changes in management, product offerings and overall financial strength
and

. the potential for takeovers and acquisitions.

This is due to the fact that prices of securities react to the fiscal and
business conditions of the company that issued the securities. Factors
affecting a company's particular industry, such as increased production costs,
also may affect the value of its securities.

16
<PAGE>

CREDIT RISK

CURRENCY RISK

DERIVATIVES RISK

17
<PAGE>

EMERGING MARKETS RISK

FOREIGN INVESTMENT RISK

INTEREST RATE RISK

18
<PAGE>

LIQUIDITY RISK

INVESTMENT MANAGEMENT RISK

Investment management risk is the risk that a Fund does not achieve its
investment objective, even though the Sub-Adviser uses various investment
strategies and techniques.

MARKET RISK

This is the risk that the price of a security held by a Fund will fall due to
changing economic, political or market conditions or to factors affecting
investor psychology.

PREPAYMENT RISK

OTHER INVESTMENT STRATEGIES

Derivative Investments. (APPLICABLE TO EACH FUND) Instead of investing
- ----------------------
directly in the types of portfolio securities described in the Summary, each
Fund may buy or sell a variety of "derivative" investments to gain exposure to
particular securities or markets. Derivatives are financial contracts whose
value depends on, or is

19
<PAGE>

derived from, the value of an underlying asset, reference rate or index. A
Fund's Sub-Adviser will sometimes use derivatives as part of a strategy designed
to reduce other risks and sometimes will use derivatives to enhance returns,
which increases opportunities for gain but also involves greater risk.

Foreign Investments. (APPLICABLE TO EACH FUND) Each Fund may invest all or a
- -------------------
substantial part of its portfolio in securities of companies that are located or
primarily doing business in a foreign country. A company is considered to be
located in a foreign country if it is organized under the laws of, or has a
principal office in, that country. A company is considered as primarily doing
business in a country if (i) the company derives at least 50% of its gross
revenues or profits from either goods or services produced or sold in the
country or (ii) at least 50% of the company's assets are situated in the
country. A Fund may invest in foreign securities either directly or indirectly
through the use of depositary receipts, such as ADRs. Depositary receipts are
generally issued by banks or trust companies and evidence ownership of
underlying foreign securities. An ADR may be sponsored by the issuer of the
underlying foreign security or it may be issued in unsponsored form. The
holder of a sponsored ADR is likely to receive more frequent and extensive
financial disclosure concerning the foreign issuer than the holder of an
unsponsored ADR and generally will bear lower transaction charges. The Select
Capital Appreciation Fund and Select International Equity Fund may also purchase
foreign securities through European Depositary Receipts and Global Depositary
Receipts.

Lending of Securities. (APPLICABLE TO ALL FUNDS) To realize additional income,
- ---------------------
the Funds may lend portfolio securities to broker-dealer or financial
institutions in an amount up to 33-1/3% of a Fund's total assets. While any
such loan is outstanding, a Fund will continue to receive amounts equal to the
interest or dividends paid by the issuer on the securities, as well as interest
(less any rebates to be paid to the borrower) on the investment of the
collateral or a fee from the borrower. Each Fund will have the right to call
each loan and obtain the securities. Lending portfolio securities involves
possible delays in receiving additional collateral or in the recovery of the
securities or possible loss of rights in the collateral.

20
<PAGE>

securities (and securities deemed to be illiquid). These limits do not apply if
the Board of Trustees determines that the restricted securities are liquid. The
Board of Trustees has adopted guidelines and delegated to the Manager the daily
function of determining and monitoring liquidity of restricted securities. The
Board, however, retains sufficient oversight and is ultimately responsible for
the determinations. This investment practice could increase the level of
illiquidity in a Fund if buyers lose interest in restricted securities. As a
result, a Fund might not be able to sell these securities when its Sub-Adviser
wants to sell, or might have to sell them at less than fair value. In addition,
market quotations for these securities are less readily available.

MANAGEMENT OF THE FUNDS

The Trust is governed by a Board of Trustees. Allmerica Financial Investment
Management Services, Inc. is the investment Manager of the Trust responsible for
managing the Trust's day-to-day business affairs. The Manager is located at 440
Lincoln Street, Worcester, MA 01653. The Manager and its predecessor, Allmerica
Investment Management Company, Inc., have been managing mutual funds since 1985.
The Manager currently serves as investment manager to one other mutual fund.
Sub-Advisers have been hired to manage the investments of the Funds. The Trust
and Manager have obtained an order of exemption from the SEC that permits the
Manager to enter into and materially amend sub-advisory agreements with non-
affiliated Sub-Advisers without obtaining shareholder approval. The Manager has
ultimate responsibility to oversee Sub-Advisers. The Manager has the ability,
subject to approval of the Trustees, to hire and terminate Sub-Advisers and to
change materially the terms of the Sub-Adviser Agreements, including
thecompensation paid to the Sub-Advisers, without the approval of the
shareholders of the Funds. The Sub-Advisers have been selected by the Manager
and Trustees with the help of BARRA RogersCasey, Inc., a pension consulting
firm. The fees earned by each Sub-Adviser and BARRA RogersCasey are paid by the
Manager. The performance by the Sub-Advisers is reviewed quarterly by a
committee of the Board of Trustees, with assistance from BARRA RogersCasey.

21
<PAGE>

The following table provides information about each Fund's Sub-Adviser:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
FUND NAME,
SUB-ADVISER NAME AND ADDRESS EXPERIENCE
-----------------------------------------------------------------------------------------------------------------
<S> <C>
Select Emerging Markets Fund Organized in 1980 and has $27.1 billion assets under
----------------------------
Schroder Capital Management management as of December 31, 1998. Provides
International Inc. global equity and fixed income management services
787 Seventh Avenue to mutual funds and other institutional investors.
New York, NY 10019
-----------------------------------------------------------------------------------------------------------------
Select Aggressive Growth Fund Has over $31 billion assets under management as of
-----------------------------
Nicholas-Applegate Capital Management, L.P. January 21, 1999. Founded in 1984. Clients
600 West Broadway, Suite 2900 include employee benefit and retirement plans,
San Diego, CA 92101 foundations, investment companies and individuals.
-----------------------------------------------------------------------------------------------------------------
Select Capital Appreciation Fund Manages with its affiliates assets totaling $148
--------------------------------
T. Rowe Price Associates, Inc. billion as of December 31, 1998 for seven million
100 East Pratt Street individual and institutional investor accounts.
Baltimore, MD 21202 Founded in 1937.
-----------------------------------------------------------------------------------------------------------------
Select Value Opportunity Fund Established in 1973. Over $4.3 billion assets
-----------------------------
Cramer Rosenthal McGlynn, LLC under management as of December 31, 1998.
707 Westchester Avenue Provides investment advice to mutual funds,
White Plains, NY 10604 individuals, government agencies, pension plans
and trusts.
-----------------------------------------------------------------------------------------------------------------
Select International Equity Fund Managed over $38 billion in global securities as
--------------------------------
Bank of Ireland Asset Management (U.S.) Ltd. of December 31, 1998. Founded in 1966. Provides
26 Fitzwilliam Place, Dublin 2, Ireland and international investment management services.
20 Horseneck Lane
Greenwich, CT 06830
-----------------------------------------------------------------------------------------------------------------
Select Growth Fund As of December 31, 1998, $294 billion assets under
------------------
Putnam Investment Management, Inc. management, including affiliates. Investment
One Post Office Square manager of mutual funds and other clients since
Boston, MA 02109 1937.
-----------------------------------------------------------------------------------------------------------------
Select Strategic Growth Fund Began operations in 1973. Manages portfolios for
----------------------------
Cambiar Investors, Inc. corporations, pension plans and financial
8400 East Prentice Avenue institutions. As of December 31, 1998, $2.3
Suite 460 billion assets under management.
Englewood, CO 80111
-----------------------------------------------------------------------------------------------------------------
Select Growth and Income Fund Incorporated in 1984. With affiliates, over $300
----------------------------- billion assets under management as of December 31,
J.P. Morgan Investment Management Inc. 1998. Serves as investment adviser for employee
522 Fifth Avenue benefit plans and other institutional assets, as
New York, NY 10036 well as mutual funds and variable annuities.

-----------------------------------------------------------------------------------------------------------------
Select Income Fund Founded in 1933. $46 billion in assets under
------------------
Standish, Ayer & Wood, Inc. management. Manages portfolios for pension plans,
One Financial Center financial institutions and endowment and
Boston, MA 02111 foundation funds.
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>

For a sample listing of certain of the Sub-Advisers' clients, see "Investment
Management and Other Services" in the SAI.

22
<PAGE>

The following individuals or groups of individuals are primarily responsible for
the day-to-day management of the Funds' portfolios:

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
FUND NAME AND SUB- NAME AND TITLE OF SERVICE WITH BUSINESS EXPERIENCE
ADVISER NAME PORTFOLIO MANAGER(S) SUB-ADVISER FOR PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Select Emerging Markets Fund John A. Troiano, Chief Executive and 1981 - Present Joined SCMI as an investment analyst
- ----------------------------
Schroder Capital Management Chairman of Emerging Markets Committee specializing in engineering and
International Inc. ("SCMI") technology; In 1989 set up SCMI's
Latin American team.

Mark Bridgeman, First Vice President 1990 - Present Joined SCMI in 1990 and is Fund
Manager specializing in African
markets.

Heather F. Crighton, Director 1993 - Present Joined SCMI in 1993 as Fund Manager
specializing in Asian emerging
markets.

- ------------------------------------------------------------------------------------------------------------------------------------
Select Aggressive Growth Fund Lawrence S. Speidell, Partner 1994 - Present Director of Global/Systematic
- -----------------------------
Nicholas-Applegate Capital Portfolio Management and Research at
Management, L.P. ("NACM") NACM. Prior to joining NACM, he spent
ten years with Batterymarch Financial
Management.

John J. Kane, Partner 1994 - Present Senior Portfolio Manager for the U.S.
Systematic portfolios at NACM. Prior
to joining NACM in 1994, he was
employed by ARCO Investment
Management Company and General
Electric.

- ------------------------------------------------------------------------------------------------------------------------------------
Select Capital Appreciation Fund Brian W.H. Berghuis, Chartered 1985 - Present He has fifteen years experience in
- -------------------------------
T. Rowe Price Associates, Inc. Financial Analyst equity research and portfolio
("T. Rowe Price") management. He is Chairman of the
investment team for the Fund.

- ------------------------------------------------------------------------------------------------------------------------------------
Select Value Opportunity Fund Ronald H. McGlynn, CEO and President 1995 - Present He joined Cramer Rosenthal in 1973,
- -----------------------------
Cramer, Rosenthal, McGlynn, of Cramer Rosenthal has 29 years of investment
LLC ("Cramer Rosenthal") experience and serves as Co-Chief
Investment Officer and Portfolio
Manager.

Jay B. Abramson, Executive Vice 1995 - Present He has been with Cramer Rosenthal
President and Director of Research since 1985 and his overall
and Co-Chief Investment Officer responsibility is for investment
research.

- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

23
<PAGE>

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
FUND NAME AND SUB- NAME AND TITLE OF SERVICE WITH BUSINESS EXPERIENCE
ADVISER NAME PORTFOLIO MANAGER(S) SUB-ADVISER FOR PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Select International Equity Christopher Reilly, Chief Investment 1980 - Present Since 1985, he has had overall
- ---------------------------
Fund Bank of Ireland Asset Officer responsibility for asset management.
Management (U.S.) Limited He previously worked in the United
("BIAM") Kingdom in stockbrokering and
investment management.

Denis Donovan, Director-Portfolio 1985 - Present Prior to joining BIAM , he spent
Manager more than 13 years in the money
market and foreign exchange
operations of the Central Bank of
Ireland. At present, he has overall
responsibility for the portfolio
management function for all of BIAM's
client base.

Peter Wood 1985 - Present Prior to 1985, he spent five years
with another leading investment
management firm. He is now
responsible for portfolio
construction at BIAM.

Jane Neill, Senior Equity Analyst 1994 - Present Previously, she was Chief Investment
Officer with another leading Irish
investment management firm.

- ------------------------------------------------------------------------------------------------------------------------------------
Select Growth Fund C. Beth Cotner, CFA, Chief Investment 1995 - Present Prior to 1995, Ms. Cotner was
- -------------------
Putnam Investment Management, Officer Executive Vice President at Kemper
Inc. ("Putnam") Financial Services.

Manuel Weiss, CFA, Senior Vice 1987 - Present He has been an investment
President professional with Putnam since 1987.

- ------------------------------------------------------------------------------------------------------------------------------------
Select Strategic Growth Fund Michael S. Barish, CFA and President 1973 - Present He founded Cambiar in 1973 and has
- ---------------------------- 36 years of investment experience.
Cambiar Investors, Inc. He is a generalist and is
("Cambiar") responsible for the consumer goods
and healthcare securities.

Kathleen M. McCarty, CFA, Senior Vice 1987 - Present Prior to 1987, Ms. McCarty was
President employed by Dain Bosworth as Vice
President of Research. She is
responsible for financial services,
communication services and utilities
securities.

Michael J. Gardner, CFA and Vice 1995 - Present Prior to 1995, Mr. Gardner was
President employed by Simmons & Co. He is
responsible for energy and capital
goods securities.

- ------------------------------------------------------------------------------------------------------------------------------------
Select Growth and Income Fund Bernard A. Kroll, Vice President 1996 - Present Prior to joining J.P. Morgan in
- ----------------------------- 1996, Mr. Kroll was an equity
J.P. Morgan Investment Management derivatives specialist at
Inc. ("J.P. Morgan") Goldman Sachs & Co., founded
his own software development
firm and options broker-dealer,
and managed several derivatives
businesses at Kidder, Peabody
& Co. He is a portfolio manager
in the Structured Equity Group.

24
<PAGE>

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
FUND NAME AND SUB- NAME AND TITLE OF SERVICE WITH BUSINESS EXPERIENCE
ADVISER NAME PORTFOLIO MANAGER(S) SUB-ADVISER FOR PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Select Income Fund Edward H. Ladd, Chairman and Managing 1962 - Present He is the firm's economist and also
- ------------------
Standish, Ayer & Wood, Inc. Director assists clients in establishing
("SAW") investment strategies. Mr. Ladd is a
Director of the Federal Reserve Bank
of Boston, New England Electric
System, Greylock Management and
Harvard Management Corp. and a member
of SAW's Executive Committee.

George W. Noyes, President and Managing 1970 - Present He directs bond policy formulation
Director and manages institutional bond
portfolios at SAW. Mr. Noyes is Vice
Chairman of the ICFA Research
Foundation and serves on SAW's
Executive Committee.

Dolores S. Driscoll, Managing Director 1974 - Present She manages fixed-income portfolios
with specific emphasis on mortgage
pass-throughs and original issue
discount bonds. Ms. Driscoll also
serves on SAW's Executive Committee.

Richard C. Doll, Manager 1984 - Present He is a portfolio manager with
research responsibilities in
convertible bonds. Prior to joining
SAW, Mr. Doll was a Vice President
with the Bank of New England.

Maria D. Furman, Vice President and 1976 - Present She is head of the tax-exempt area
Director and manages insurance and pension
fund accounts. Ms. Furman currently
serves on SAW's Executive Committee.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

For the fiscal year ended December 31, 1998, the Funds paid the Manager the
fees shown in the table below:

<TABLE>
<CAPTION>
FEE (AS A PERCENTAGE OF
Fund AVERAGE NET ASSETS)
---- ------------------
<S> <C>
Select Emerging Markets Fund............... 1.35%
Select Aggressive Growth Fund.............. 0.88%
Select Capital Appreciation Fund........... 0.94%
Select Value Opportunity Fund.............. 0.91%
Select International Equity Fund........... 0.90%
Select Growth Fund......................... 0.82%
Select Strategic Growth Fund............... 0.85%
Select Growth and Income Fund.............. 0.68%
Select Income Fund......................... 0.54%
</TABLE>

For fiscal year ended December 31, 1998, the Manager paid each Sub-Adviser
aggregate fees as set forth below:

<TABLE>
<CAPTION>
FEE (AS A PERCENTAGE OF
SUB-ADVISER AVERAGE NET ASSETS)
----------- ------------------
<S> <C>
Schroder Capital Management International Inc./(1)/
(Select Emerging Markets Fund)................................. 1.00%
</TABLE>

25
<PAGE>

<TABLE>
<CAPTION>
FEE (AS A PERCENTAGE OF
SUB-ADVISER AVERAGE NET ASSETS)
----------- ------------------
<S> <C>
Nicholas-Applegate Capital Management, L.P.
(Select Aggressive Growth Fund)....................................... 0.51%
T. Rowe Price Associates, Inc. *
(Select Capital Appreciation Fund).................................... 0.52%
Cramer Rosenthal McGlynn, LLC
(Select Value Opportunity Fund)....................................... 0.54%
Bank of Ireland Asset Management (U.S.) Limited
(Select International Equity Fund).................................... 0.33%
Putnam Investment Management, Inc.
(Select Growth Fund).................................................. 0.33%
Cambiar Investors, Inc./(2)/
(Select Strategic Growth Fund)........................................ 0.50%
John A Levin & Co., Inc. **
(Select Growth and Income Fund)....................................... 0.30%
Standish, Ayer & Wood, Inc.
(Select Income Fund).................................................. 0.20%
</TABLE>
_________________________________________

ASSETS RATE
------ ----
First $50 Million.................... 1.00%
Next $50 Million..................... 0.85%
Next $150 Million.................... 0.75%
Over $250 Million.................... 0.60%

ASSETS RATE
------ ----
First $50 Million.................... 0.50%
Next $100 Million.................... 0.45%
Next $100 Million.................... 0.35%
Next $100 Million.................... 0.30%
Over $350 Million.................... 0.25%

* T. Rowe Price Associates, Inc. assumed Sub-Adviser responsibilities from Janus
Capital Corporation on April 1, 1998. Janus Capital Corporation served as Sub-
Adviser of the Select Capital Appreciation Fund from April 28, 1995 to March 31,
1998. Janus Capital Corporation received a fee computed daily at an annual rate
based on the average daily net assets of the Select Capital Appreciation Fund,
based on the following schedule:

ASSETS RATE
------ ----
First $100 Million................... 0.60%
Over $100 Million.................... 0.55%
Next $250 Million.................... 0.50%
Over $500 Million.................... 0.45%

26
<PAGE>

T. Rowe Price Associates, Inc. receives a fee computed daily at an annual rate
of 0.50% based on the average daily net assets of the Select Capital
Appreciation Fund.

** J.P. Morgan Investment Management Inc. replaced John A. Levin & Co., Inc. as
Sub-Adviser of the Select Growth and Income Fund on April 1, 1999.

PRICING OF FUND SHARES

The Funds sell and redeem their shares at a price equal to their net asset value
("NAV") without paying any sales or redemption charges. The NAV of a share is
computed by adding the current value of all the Fund's assets, subtracting its
liabilities and dividing by the number of its outstanding shares. NAV is
computed once daily at the close of regular trading on the New York Stock
Exchange each day the Exchange is open normally 4:00 p.m. Eastern Time. Orders
for the purchase or redemption of shares are filled at the next NAV computed
after an order is received by the Fund. The Funds do not accept orders or
compute their NAV's on days when the Exchange is closed.

Equity securities are valued based on market value if market quotations are
readily available. In other cases, they are valued at their fair value following
procedures approved by the Trustees. Debt securities (other than short-term
obligations) normally are valued based on pricing service valuations. All
securities of the Money Market Fund are valued at amortized cost. Debt
obligations in the other Funds with a remaining maturity of 60 days or less are
valued at amortized cost when amortized cost is considered to represent fair
value. Values for short-term obligations of the other Funds having a remaining
maturity of more than 60 days are based upon readily available market
quotations.

PURCHASE AND REDEMPTION OF SHARES
---------------------------------

27
<PAGE>

Trustees will monitor events to identify any material conflicts and determine if
any action should be taken to resolve such conflict.

Normally, redemption payments will be made within seven days after the Trust
receives a written redemption request. Redemptions may be suspended when trading
on the New York Stock Exchange is restricted or when permitted by the Securities
and Exchange Commission.

DISTRIBUTIONS AND TAXES

Distributions
- -------------

Each Fund pays out substantially all of its net investment income and net
capital gains to shareholders each year. Net investment income is paid quarterly
in the case of the Select Growth and Income Fund and Select Income Fund;
annually in the case of the Select Emerging Markets Fund, Select Aggressive
Growth Fund, Select Capital Appreciation Fund, Select Value Opportunity Fund,
Select International Equity Fund, Select Growth Fund and Select Strategic Growth
Fund. Distributions of net capital gains for the year, if any, are made
annually. All dividends and capital gain distributions are applied to purchase
additional Fund shares at net asset value as of the payment date. Fund shares
are held by the Separate Accounts and any distributions are reinvested
automatically by the Separate Accounts.

Taxes
- -----

28
<PAGE>

YEAR 2000

Some computer software cannot distinguish between dates in the year 2000 and
dates in the year 1900 because of the way that dates are encoded and calculated.
The services provided to the Trust by the Manager, Sub-Advisers, the Custodian
and other external service providers depend on the proper functioning of their
computer software. Failure to correct or replace any non-compliant software
could adversely affect, among other things, the handling of securities trades,
the payment of interest and dividends, the pricing of the Trust's securities and
of the Trust's shares, and account services. The Trust has requested information
from its service providers with respect to their plans to be Year 2000
compliant. The Trust has been advised by its service providers that they either
are Year 2000 compliant now or expect to be compliant prior to December 31,
1999. However, there can be no guarantee that the Trust's operations will not be
adversely affected by non-compliant systems of its service providers or of other
third parties which interact with such service providers. The Year 2000 problem
could also have an adverse effect on issuers whose securities are owned by the
Funds, potentially decreasing the value of such securities.

- ----------------------------
The conversion of certain European currencies to the "euro" may present
additional risks to those Funds exposed to such currencies.

FINANCIAL HIGHLIGHTS

[Sample format]

The Fund
- --------------------

29
<PAGE>

Dividends (from net investment income)
Distributions (from capital gains)
Returns of Capital
Total Distributions

Net Asset Value, End of Period

Total Return
- ------------
................................................................................

Ratios/Supplemental Data
- ------------------------

Net Assets, End of Period
Ratios of Expenses to Average Net Assets
Ratios of Net Income to Average Net Assets
Portfolio Turnover Rate

30
<PAGE>

[Back Cover]

ALLMERICA INVESTMENT TRUST

440 Lincoln Street
Worcester, Massachusetts 01653
(508) 855-1000

The Trust's Statement of Additional Information (SAI) includes additional
information about the Funds. The Trust's annual and semi-annual reports to
shareholders include information about the investments of the Funds. The SAI and
the financial statements included in the Fund's most recent annual report to
shareholders are incorporated by reference into this prospectus, which means
they are part of this prospectus for legal purposes. The Trust's annual report
discusses the market conditions and investment strategies that significantly
affected each Fund's performance during its last fiscal year. You may get free
copies of these materials, request other information about a Fund or make
shareholder inquiries by calling 1-800-______.

31
<PAGE>

APPENDIX A
----------

INVESTMENT TECHNIQUES AND STRATEGIES
- ------------------------------------

In managing its portfolios of investments, the Trust may make use of the
following investment techniques and strategies:

SYMBOLS
- -------
. Permitted
- --- Not Permitted

SELECT SELECT SELECT SELECT SELECT SELECT SELECT
EMERGING AGGRESSIVE CAPITAL VALUE INTERNATIONAL GROWTH STRATEGIC
MARKETS GROWTH APPRECIATION OPPORTUNITY EQUITY FUND GROWTH
INVESTMENT TECHNIQUE/STRATEGY FUND FUND FUND FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Asset-Backed Securities ---- ---- ---- ---- ---- ---- ----
Financial Futures Contracts
and Related Options . . . . . . .
Foreign Securities . . . . . . .
Forward Commitments ---- ---- . ---- ---- ---- ----
Forward Contracts on Foreign Currencies . ---- . ---- . . ----
High Yield Securities . ---- . ---- ---- . ----
Investments in Money Market Securities . . . . . . .
Mortgage-Backed Securities ---- ---- ---- ---- ---- ---- ----
Purchasing Options . . . . . . .
Repurchase Agreements . . . . . . .
Restricted Securities . . . . . . .
Reverse Repurchase Agreements ---- ---- . ---- ---- ---- ----
Securities Lending . . . . . . .
Stand-By Commitments ---- ---- ---- ---- ---- ---- ----
Stripped Mortgage-Backed Securities ---- ---- ---- ---- ---- ---- ----
Swap and Swap-Related Products ---- ---- . ---- ---- ---- ----
When-Issued Securities . . . . . . .
Writing Covered Options . . . . . . .

<CAPTION>
SELECT
GROWTH SELECT
AND INCOME INCOME
INVESTMENT TECHNIQUE/STRATEGY FUND FUND
- -----------------------------------------------------------------------------
<S> <C> <C>
Asset-Backed Securities . .
Financial Futures Contracts
and Related Options . .
Foreign Securities . .
Forward Commitments ---- .
Forward Contracts on Foreign Currencies ---- .
High Yield Securities . .
Investments in Money Market Securities . .
Mortgage-Backed Securities ---- .
Purchasing Options . .
Repurchase Agreements . .
Restricted Securities . .
Reverse Repurchase Agreements ---- ----
Securities Lending . .
Stand-By Commitments ---- .
Stripped Mortgage-Backed Securities ---- .
Swap and Swap-Related Products ---- ----
When-Issued Securities . .
Writing Covered Options . .
</TABLE>
<PAGE>

ALLMERICA INVESTMENT TRUST

PROSPECTUS DATED: MAY 1, 1999

The Money Market Fund is a separate portfolio of the Trust which serves as the
underlying investment for an insurance related account.

This Prospectus explains what you should know about the Fund before you invest.
Please read it carefully before you invest.

440 LINCOLN STREET
WORCESTER, MASSACHUSETTS 01653
(508) 855-1000
<PAGE>

TABLE OF CONTENTS

<TABLE>
<S> <C>
FUND SUMMARY............................................................. 3
Objective, Strategies and Risks........................................ 3

EXPENSE SUMMARY.......................................................... 5

DESCRIPTION OF PRINCIPAL INVESTMENT RISKS................................ 6

OTHER INVESTMENT STRATEGIES.............................................. 7

MANAGEMENT OF THE FUND................................................... 8

PRICING OF FUND SHARES................................................... 9

PURCHASE AND REDEMPTION OF SHARES........................................ 9

DISTRIBUTIONS AND TAXES.................................................. 10

YEAR 2000................................................................ 10

FINANCIAL HIGHLIGHTS..................................................... 10
</TABLE>

2
<PAGE>

FUND SUMMARY

This Prospectus describes the Money Market Fund of Allmerica Investment Trust,
which provides a broad range of investment options through 14 different Funds,
each a separate investment Portfolio. The other Funds are described in separate
prospectuses. Shares of the Funds are sold exclusively to variable annuity and
variable life insurance Separate Accounts and qualified pension and retirement
plans.

The investment manager of the Trust is Allmerica Financial Investment Management
Services, Inc. The Manager is responsible for managing the Trust's daily
business and has general responsibility for the management of the investments of
the Funds. The Manager, at its expense, has contracted with Allmerica Asset
Management, Inc. ("AAM") to manage the investments of the Money Market Funds.
AAM has been selected on the basis of various factors including management
experience, investment techniques and staffing. See "Management of the Funds"
for more information about the Manager and the Sub-Adviser.

The following summary describes the Money Market Fund's investment objective
and principal investment strategies, identifies the principal investment risks
of investing in the Fund, and provides a performance chart for the Fund. Note
that any percentage limitations listed under the Fund's principal investment
strategies apply at the time of investment. The principal risks are discussed
in more detail under "Description of Principal Investment Risks". The bar chart
shows how the investment returns of the shares of the Fund have varied in the
past ten years . The table following the bar chart shows how the Fund's average
annual return for the last one, five and ten years compare to those of a broad-
based securities market index. PAST PERFORMANCE DOES NOT NECESSARILY INDICATE
HOW THE FUND WILL PERFORM IN THE FUTURE. The bar chart and table give some
indication of the risks of investing in the Fund by showing changes in the
Fund's performance.

OBJECTIVE, STRATEGIES AND RISKS
- -------------------------------

Sub-Adviser: Allmerica Asset Management, Inc.

Investment Objective: The Money Market Fund seeks to obtain maximum current
income consistent with preservation of capital and liquidity.

Principal Investment Strategies: The Money Market Fund seeks to achieve its
objective by investing in high quality money market instruments such as
obligations issued or guaranteed by the United States Government, its agencies,
or instrumentalities; commercial paper; obligations of banks or savings and loan
associations including bankers acceptances and certificates of deposit;
repurchase agreements and cash and cash

3
<PAGE>

equivalents. The Fund may invest up to 25% of its assets in U.S. dollar
denominated foreign securities (not including its investments in American
Depository Receipts or "ADRs").

Principal Risks:

. Credit Risk
. Interest Rate Risk
. Investment Management Risk
. Market Risk

YEARLY PERFORMANCE

[BAR CHART APPEARS HERE]

<TABLE>
<S> <C>
1989 9.07%

1990 8.17%

1991 6.22%

1992 3.78%

1993 3.00%

1994 3.93%

1995 5.84%

1996 5.36%

1997 5.47%

1998 5.51%
</TABLE>

During the period shown above the highest quarterly return was 9.44% for the
quarter ended 06/30/89 and the lowest was 2.91% for the quarter ended 07/31/93.

4
<PAGE>

PERFORMANCE TABLE

<TABLE>
<CAPTION>
------------------------------------------------------------
Average Annual Total
Returns (for the periods Past Past Past
ending December 31, 1998) One Year 5 Years 10 Years
------------------------------------------------------------
<S> <C> <C> <C>
Fund Shares 5.51% 5.22% 5.62%
------------------------------------------------------------
IBC/Donoghue First Tier 4.96% 4.80% 5.22%
Money Market Index*
------------------------------------------------------------
</TABLE>

EXPENSE SUMMARY

Expenses are one of several factors to consider when investing in the Money
Market Fund. Expenses shown are based on expenses incurred in respect of shares
of the Fund for the 1998 fiscal year. The Example shows the cumulative expenses
attributable to a hypothetical $10,000 investment in the Fund over specified
periods.

Fees and Expenses of the Fund
- -----------------------------

This table describes the fees and expenses that you may pay if you invest in the
Fund. Please note that the expenses listed below do not include the expenses of
the applicable variable insurance product that you are purchasing. You should
refer to the variable insurance product prospectus for more information relating
to the fees and expenses of that product, which are in addition to the expenses
of the Fund.

(1) Until further notice, the Manager has declared a voluntary expense
limitation of 0.60% for the Money Market Fund. The total operating
expenses of the Fund were less than its expense limitation throughout 1998.

The declaration of a voluntary management fee or expense limitation in any
year does not bind the Manager to declare future expense limitations with
respect to the Fund. These limitations may be terminated at any time.

Example
- -------

This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment earns a 5% return each year and that
the Fund's operating expenses remain the same. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:

5
<PAGE>

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
------ ------- ------- --------
<S> <C> <C> <C>
$32 $101 $176 $397
</TABLE>

DESCRIPTION OF PRINCIPAL INVESTMENT RISKS

The following is a summary of the principal risks of investing in the Money
Market Fund and the factors likely to cause the value of your investment in the
Fund to decline. The principal risks applicable to the Fund are identified
under "Fund Summary". There are also many factors that could cause the value
of your investment in the Fund to decline which are not described here. It is
important to remember that there is no guarantee that the Fund will achieve its
investment objective, and an investor in the Fund could lose money.

CREDIT RISK

Credit risk is the risk that the issuer of a fixed income security will not be
able to pay principal and interest when due. There are different levels of
credit risk. Funds that invest in lower-rated securities have higher levels of
credit risk. The price of a fixed income security can be expected to fall if
the issuer defaults on its obligation to pay principal or interest, the rating
agencies downgrade the issuer's credit rating or there is negative news that
affects the market's perception of the issuer's credit risk.

INTEREST RATE RISK

When interest rates rise, the prices of fixed income securities in the Fund's
portfolio will generally fall. Conversely, when interest rates fall, the prices
of fixed income securities in the Fund's portfolio will generally rise. Even a
fund that invests in the highest quality debt securities is subject to interest
rate risk. Interest rate risk usually will affect the price of a fixed income
security more if the security has a longer maturity. Fixed income securities
with longer maturities will therefore be more volatile than other fixed income
securities with shorter maturities.

INVESTMENT MANAGEMENT RISK

Investment management risk is the risk that a fund does not achieve its
investment objective, even though the Sub-Adviser uses various investment
strategies and techniques.

6
<PAGE>

MARKET RISK

This is the risk that the price of a security held by the Fund will fall due to
changing economic, political or market conditions or to factors affecting
investor psychology.

OTHER INVESTMENT STRATEGIES

The Fund Summary starting on page 3 describes the investment objective and the
principal investment strategies and risks of the Fund. The Fund may at times
use the following investment strategies. Attached as Appendix A is a chart with
a listing of various investment techniques and strategies that the Sub-Adviser
of the Fund may utilize. The Fund may decide that it is in the best interests
of shareholders to make changes to its investment objective and strategies
described in this Prospectus. The investment objective and strategies may be
changed with the approval of the Board of Trustees, but without shareholder
approval.

Foreign Investments. The Fund may invest all or a substantial part of its
- -------------------
portfolio in U.S. dollar denominated securities of companies that are located or
primarily doing business in a foreign country. A company is considered to be
located in a foreign country if it is organized under the laws of, or has a
principal office in, that country. A company is considered as primarily doing
business in a country if (i) the company derives at least 50% of its gross
revenues or profits from either goods or services produced or sold in the
country or (ii) at least 50% of the company's assets are situated in the
country. The Fund may invest in foreign securities either directly or indirectly
through the use of depositary receipts, such as ADRs. Depositary receipts are
generally issued by banks or trust companies and evidence ownership of
underlying foreign securities. An ADR may be sponsored by the issuer of the
underlying foreign security or it may be issued in unsponsored form. The holder
of a sponsored ADR is likely to receive more frequent and extensive financial
disclosure concerning the foreign issuer than the holder of an unsponsored ADR
and generally will bear lower transaction charges.

Lending of Securities. To realize additional income, the Fund may lend
- ---------------------
portfolio securities to broker-dealer or financial institutions in an amount up
to 33-1/3% of the Fund's total assets. While any such loan is outstanding, the
Fund will continue to receive amounts equal to the interest or dividends paid by
the issuer on the securities, as well as interest (less any rebates to be paid
to the borrower) on the investment of the collateral or a fee from the borrower.
The Fund will have the right to call each loan and obtain the securities.
Lending portfolio securities involves possible delays in receiving additional
collateral or in the recovery of the securities or possible loss of rights in
the collateral.

7
<PAGE>

Restricted Securities. The Fund may purchase fixed-income securities that are
- ---------------------
not registered under Federal securities law ("restricted securities"), but can
be offered and sold to certain "qualified institutional buyers". The Fund will
not invest more than 10% of its net assets in restricted securities (and
securities deemed to be illiquid). These limits do not apply if the Board of
Trustees determines that the restricted securities are liquid. The Board of
Trustees has adopted guidelines and delegated to the Manager the daily function
of determining and monitoring liquidity of restricted securities. The Board,
however, retains sufficient oversight and is ultimately responsible for the
determinations. This investment practice could increase the level of
illiquidity in the Fund if buyers lose interest in restricted securities. As a
result, the Fund might not be able to sell these securities when its Sub-Adviser
wants to sell, or might have to sell them at less than fair value. In addition,
market quotations for these securities are less readily available.

Temporary Defensive Strategies. At times a Sub-Adviser may determine that
- ------------------------------
market conditions make it desirable temporarily to suspend the Fund's normal
investment activities. The Fund may not achieve its investment objective while
these strategies are in effect.

MANAGEMENT OF THE FUND

The Trust is governed by a Board of Trustees. Allmerica Financial Investment
Management Services, Inc. is the investment Manager of the Trust responsible for
managing the Trust's day-to-day business affairs. The Manager is located at 440
Lincoln Street, Worcester, MA 01653. The Manager and its predecessor, Allmerica
Investment Management Company, Inc., have been managing mutual funds since 1985.
The Manager currently serves as investment manager to one other mutual fund.
Allmerica Asset Management, Inc. , located at 440 Lincoln Street, Worcester,
Massachusetts, serves as the Fund's Sub-Adviser. AAM was incorporated in 1993
and as of December 31, 1998 had $13.2 billion in assets under management. AAM
serves as investment adviser to investment companies and affiliated insurance
company accounts. John C. Donohue, Vice President of AAM, is primarily
responsible for the day-to-day management of the Fund. Mr. Donohue has been with
AAM since 1995. He was a portfolio manager at CS First Boston Investment
Management prior to joining AAM.

The Sub-Adviser has been selected by the Manager and Trustees with the help of
BARRA RogersCasey, Inc., a pension consulting firm. The fee earned by the Sub-
Adviser and BARRA RogersCasey is paid by the Manager. The performance of the
Sub-Adviser is reviewed quarterly by a committee of the Board of Trustees, with
assistance from BARRA RogersCasey.

8
<PAGE>

For the fiscal year ended December 31, 1998, the Fund paid the Manager a fee of
0.26% of the Fund's average net assets, and the Manager paid AAM an aggregate
fee of 0.10% of the Fund's average net assets.

PRICING OF FUND SHARES

The Money Market Fund sells and redeems its shares at a price equal to its net
asset value ("NAV") without paying any sales or redemption charges. The NAV of
a share is computed by adding the current value of all the Fund's assets,
subtracting its liabilities and dividing by the number of its outstanding
shares. NAV is computed once daily at the close of regular trading on the New
York Stock Exchange each day the Exchange is open normally 4:00 p.m. Eastern
Time. Orders for the purchase or redemption of shares are filled at the next
NAV computed after an order is received by the Fund. The Fund does not accept
orders or compute its NAV's on days when the Exchange is closed. All securities
of the Fund are valued at amortized cost.

PURCHASE AND REDEMPTION OF SHARES

Shares of the Fund currently are purchased only by a separate account which is
the funding mechanism for a variable annuity contract. The Distributor,
Allmerica Investments, Inc., at its expense, may provide promotional incentives
to dealers who sell variable annuity contracts which invest in the Fund. The
Trust has obtained an exemptive order from the Securities and Exchange
Commission to permit Fund shares to be sold to variable annuity and variable
life insurance separate accounts of both affiliated and unaffiliated life
insurance companies and certain qualified pension and retirement plans.
Material irreconcilable conflicts may arise among various insurance policy
owners and plan participants. The Trustees will monitor events to identify any
material conflicts and determine if any action should be taken to resolve such
conflict.

No fee is charged by the Trust on redemption. The variable contracts funded
through the Separate Account are sold subject to certain fees and charges which
may include sales and redemption charges. See the Prospectuses for the variable
insurance product.

9
<PAGE>

DISTRIBUTIONS AND TAXES

Distributions
- -------------

The Fund pays out substantially all of its net investment income and net capital
gains to shareholders each year. Net investment income is paid daily in the
case of the Money Market Fund. Distributions of net capital gains for the year,
if any, are made annually. All dividends and capital gain distributions are
applied to purchase additional Fund shares at net asset value as of the payment
date. Fund shares are held by the Separate Account and any distributions are
reinvested automatically by the Separate Account.

Taxes
- -----

The Trust seeks to comply with the provisions of the Internal Revenue Code
applicable to regulated investment companies so that the Trust will not be
subject to federal income tax. [Under current tax law, dividend or capital gain
distributions from the Fund are not currently taxable when left to accumulate
within a variable annuity or variable life insurance contract. Withdrawals from
a contract generally are subject to ordinary income tax and, in many cases, to
an additional 10% penalty tax on withdrawals before age 59 1/2. Tax
consequences to investors in the Separate Accounts which are invested in the
Trust are described in more detail in the prospectuses for those accounts.]

YEAR 2000

- ----------------------------
The conversion of certain European currencies to the "euro" may present
additional risks to those Funds exposed to such currencies.

10
<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights tables are intended to help you understand the Fund's
financial performance for the past five years. Certain information reflects
financial results for a single Fund share. The total returns in the tables
represent the rate that an investor would have earned or lost on an investment
in the Fund (assuming reinvestment of all dividends and distributions). This
information has been audited by PricewaterhouseCoopers LLP, whose report, along
with each Fund's financial statements, are included in the Statement of
Additional Information or annual report, which is available upon request.

[Sample format]
The Fund
- ---------------

Net Asset Value, End of Period
Total Return
- ------------

................................................................................

Ratios/Supplemental Data
- ------------------------

Net Assets, End of Period
Ratios of Expenses to Average Net Assets
Ratios of Net Income to Average Net Assets
Portfolio Turnover Rate

11
<PAGE>

[Back Cover]

ALLMERICA INVESTMENT TRUST

Money Market Fund

440 Lincoln Street
Worcester, Massachusetts 01653
(508) 855-1000

The Trust's Statement of Additional Information (SAI) includes additional
information about the Fund. The Trust's annual and semi-annual reports to
shareholders include information about the investments of the Fund. The SAI and
the financial statements included in the Fund's most recent annual report to
shareholders are incorporated by reference into this prospectus, which means
they are part of this prospectus for legal purposes. The Trust's annual report
discusses the market conditions and investment strategies that significantly
affected each Fund's performance during its last fiscal year. You may get free
copies of these materials, request other information about the Fund or make
shareholder inquiries by calling 1-800-______.

12
<PAGE>

INVESTMENT TECHNIQUES AND STRATEGIES
- ------------------------------------

In managing its portfolios of investments, the Trust Fund may make use of the
following investment techniques and strategies:

Symbols
- -------
. Permitted
- ----- Not Permitted

INVESTMENT TECHNIQUE/STRATEGY
- ----------------------------------

Asset-Backed Securities .
Financial Futures Contracts
and Related Options ----
Foreign Securities .
Forward Commitments .
Forward Contracts on Foreign Currencies ----
High Yield Securities ----
Investments in Money Market Securities .
Mortgage-Backed Securities ----
Purchasing Options ----
Repurchase Agreements .
Restricted Securities .
Reverse Repurchase Agreements ----
Securities Lending .
Stand-By Commitments .
Stripped Mortgage-Backed Securities ----
Swap and Swap-Related Products ----
When-Issued Securities .
Writing Covered Options ----
- ----------------------------------------------------------
<PAGE>

ALLMERICA INVESTMENT TRUST

PROSPECTUS DATED: MAY 1, 1999

This Prospectus describes the following 14 investment Funds of the Trust which
serve as the underlying investments for insurance related accounts.

SELECT EMERGING MARKETS FUND
SELECT AGGRESSIVE GROWTH FUND
SELECT CAPITAL APPRECIATION FUND
SELECT VALUE OPPORTUNITY FUND
SELECT INTERNATIONAL EQUITY FUND
SELECT GROWTH FUND
SELECT STRATEGIC GROWTH FUND
GROWTH FUND
EQUITY INDEX FUND
SELECT GROWTH AND INCOME FUND
SELECT INCOME FUND
INVESTMENT GRADE INCOME FUND
GOVERNMENT BOND FUND
MONEY MARKET FUND

This Prospectus explains what you should know about each of the Funds before you
invest. Please read it carefully before you invest.

A particular Fund may not be available under the variable annuity or variable
life insurance policy which you have chosen. The Prospectus of the specific
insurance product you have chosen will indicate which Funds are available and
should be read in conjunction with this Prospectus. Inclusion in this Prospectus
of a Fund which is not available under your policy is not to be considered a
solicitation.

440 LINCOLN STREET
WORCESTER, MASSACHUSETTS 01653
(508) 855-1000
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S> <C>
FUND SUMMARIES................................................. 3
Objectives, Strategies and Risks.............................. 3
Select Emerging Markets Fund................................. 3
Select Aggressive Growth Fund................................ 4
Select Capital Appreciation Fund............................. 5
Select Value Opportunity Fund................................ 7
Select International Equity Fund............................. 8
Select Growth Fund........................................... 9
Select Strategic Growth Fund................................. 11
Growth Fund.................................................. 11
Equity Index Fund............................................ 13
Select Growth and Income Fund................................ 14
Select Income Fund........................................... 16
Investment Grade Income Fund................................. 17
Government Bond Fund......................................... 19
Money Market Fund............................................ 20

EXPENSE SUMMARY................................................ 22

DESCRIPTION OF PRINCIPAL INVESTMENT RISKS...................... 24

OTHER INVESTMENT STRATEGIES.................................... 27

MANAGEMENT OF THE FUNDS........................................ 29

PRICING OF FUND SHARES......................................... 37

PURCHASE AND REDEMPTION OF SHARES.............................. 38

DISTRIBUTIONS AND TAXES........................................ 38

YEAR 2000...................................................... 39

FINANCIAL HIGHLIGHTS........................................... 39
</TABLE>

2
<PAGE>

FUND SUMMARIES

Allmerica Investment Trust provides a broad range of investment options through
14 separate investment portfolios, or Funds. Shares of the Funds are sold
exclusively to variable annuity and variable life insurance Separate Accounts
and qualified pension and retirement plans.

The following summaries describe each Fund's investment objective and principal
investment strategies, identify the principal investment risks of investing in
the Fund, and provides performance charts for the Fund. Note that any percentage
limitations listed under a Fund's principal investment strategies apply at the
time of investment. The principal risks are discussed in more detail under
"Description of Principal Investment Risks". The bar charts show how the
investment returns of the shares of a Fund have varied in the past ten years (or
for the life of the Fund if less than 10 years). The table following each bar
chart shows how the Fund's average annual return for the last one, five and ten
years (or for the life of the Fund, if shorter) compare to those of a broad-
based securities market index. PAST PERFORMANCE DOES NOT NECESSARILY INDICATE
HOW THE FUND WILL PERFORM IN THE FUTURE. The bar charts and tables give some
indication of the risks of investing in each Fund by showing changes in the
Fund's performance. A bar chart and table are not included for two new Funds,
the Select Emerging Markets Fund and the Select Strategic Growth Fund, since as
of December 31, 1998 they had not yet had a full calendar year of investment
returns.

OBJECTIVES, STRATEGIES AND RISKS
- --------------------------------

SELECT EMERGING MARKETS FUND

Sub-Adviser: Schroder Capital Management International Inc.

Investment Objective: The Fund seeks long-term growth of capital by investing
in the world's emerging markets.

3
<PAGE>

Principal Risks:

. Company Risk
. Credit Risk
. Currency Risk
. Derivatives Risk
. Emerging Markets Risk
. Foreign Investment Risk
. Investment Management Risk
. Liquidity Risk
. Market Risk

SELECT AGGRESSIVE GROWTH FUND

Sub-Adviser: Nicholas-Applegate Capital Management, L.P.

Investment Objective: The Fund seeks above-average capital appreciation by
investing primarily in common stocks of companies which are believed to have
significant potential for capital appreciation.

4
<PAGE>

Principal Risks:

. Company Risk
. Derivatives Risk
. Investment Management Risk
. Liquidity Risk
. Market Risk

YEARLY PERFORMANCE

[BAR CHART APPEARS HERE]

<TABLE>
<S> <C>
1993 19.51%

1994 -2.31%

1995 32.28%

1996 18.55%

1997 18.71%

1998 10.56%
</TABLE>

During the period shown above the highest quarterly return was 30.61% for the
quarter ended 06/30/97 and the lowest was (24.40)% for the quarter ended
08/31/98.

PERFORMANCE TABLE

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Average Annual Total
Returns (for the periods Past Past Life
ending December 31, 1998) One Year 5 Years Of Fund
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Fund Shares 10.56% 14.99% 18.11%
- --------------------------------------------------------------------------------
Russell 2500 Index* 0.38% 14.13% 16.27%
- --------------------------------------------------------------------------------
</TABLE>

* The Russell 2500 Index is an unmanaged composite of 2,500 small-to-mid
capitalization stocks.

SELECT CAPITAL APPRECIATION FUND
Sub-Adviser: T. Rowe Price Associates, Inc.

5
<PAGE>

Principal Risks:

. Company Risk
. Credit Risk
. Currency Risk
. Derivatives Risk
. Foreign Investment Risk
. Investment Management Risk
. Liquidity Risk
. Market Risk

YEARLY PERFORMANCE

[BAR CHART APPEARS HERE]

During the period shown above the highest quarterly return was 27.90% for the
quarter ended 12/31/98 and the lowest was (19.81)% for the quarter ended
08/31/98.

T. Rowe Price Associates, Inc. became Sub-Adviser of the Fund on April 1, 1998.
Performance before that date is based on the performance of the Fund's previous
Sub-Adviser.

6
<PAGE>

PERFORMANCE TABLE

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Average Annual Total
Returns (for the periods Past Life
ending December 31, 1998) One Year of Fund
- --------------------------------------------------------------------------------
<S> <C> <C>
Fund Shares 13.88% 20.37%
- --------------------------------------------------------------------------------
Russell 2500 Index* 0.38% 17.50%
- --------------------------------------------------------------------------------
</TABLE>

* The Russell 2500 Index is a unmanaged composite of 2,500 small-to-mid
capitalization stocks.

SELECT VALUE OPPORTUNITY FUND
Sub-Adviser: Cramer Rosenthal McGlynn, LLC

Principal Risks:

. Company Risk
. Currency Risk
. Derivatives Risk
. Foreign Investment Risk
. Investment Management Risk
. Liquidity Risk
. Market Risk

7
<PAGE>

YEARLY PERFORMANCE

[BAR CHART APPEARS HERE]

Cramer Rosenthal McGlynn, LLC became Sub-Adviser of the Fund on January 1, 1997.
Performance before that date is based on the performance of the Fund's previous
Sub-Adviser.

PERFORMANCE TABLE

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Average Annual Total
Returns (for the periods Past Past Life
ending December 31, 1998) One Year 5 Years Of Fund
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Fund Shares 4.87% 13.09% 14.71%
- --------------------------------------------------------------------------------
Russell 2500 Index* 0.38% 14.13% 15.09%
- --------------------------------------------------------------------------------
</TABLE>

* The Russell 2500 Index is an unmanaged composite of 2,500 small-to-mid
capitalization stocks.

SELECT INTERNATIONAL EQUITY FUND
Sub-Adviser: Bank of Ireland Asset Management (U.S.) Limited

Investment Objective: The Fund seeks maximum long-term total return (capital
appreciation and income) primarily by investing in common stocks of established
non-U.S. companies.

8
<PAGE>

Principal Risks:

. Company Risk
. Currency Risk
. Derivatives Risk
. Foreign Investment Risk
. Investment Management Risk
. Market Risk

YEARLY PERFORMANCE

[BAR CHART APPEARS HERE]

<TABLE>
<S> <C>
1995 19.63%

1996 21.94%

1997 4.65%

1998 16.48%
</TABLE>

During the period shown above the highest quarterly return was 19.49% for the
quarter ended 12/31/98 and the lowest was (17.69)% for the quarter ended
09/30/98.

PERFORMANCE TABLE

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Average Annual Total Returns Past Life
(for the periods ending December 31, 1998) One Year Of Fund
- --------------------------------------------------------------------------------
<S> <C> <C>
Fund Shares 16.48% 12.26%
- --------------------------------------------------------------------------------
Morgan Stanley Capital International 20.33% 8.41%
EAFE Index*
- --------------------------------------------------------------------------------
</TABLE>

SELECT GROWTH FUND
Sub-Adviser: Putnam Investment Management, Inc.

9
<PAGE>

Principal Investment Strategies: To attain its objective, the Fund looks for
companies that appear to have favorable long-term growth characteristics. The
Fund typically invests in stocks of large companies, such as those included in
the S&P 500 Index, although it can also make investments in smaller growth
companies.

At least 65% of the Fund's assets normally will consist of common stocks. The
Fund also may purchase convertible bonds and preferred stocks and warrants. The
Fund normally invests substantially all of its investments in equity securities,
although it may invest up to 35% in debt securities including up to 15% in "junk
bonds". The Fund may invest up to 25% of its assets in foreign securities (not
including its investments in ADRs).

Principal Risks:

. Company Risk
. Credit Risk
. Derivatives Risk
. Investment Management Risk
. Market Risk

YEARLY PERFORMANCE

[BAR CHART APPEARS HERE]

<TABLE>
<S> <C>
1993 0.84%

1994 -1.49%

1995 24.59%

1996 22.02%

1997 34.06%

1998 35.44%
</TABLE>

During the period shown above the highest quarterly return was 25.02% for the
quarter ended 12/31/98 and the lowest was (11.84)% for the quarter ended
09/30/98.

Putnam Investment Management, Inc. became Sub-Adviser of the Fund on July 1,
1996. Performance before that date is based on the performance of the Fund's
previous Sub-Adviser.

10
<PAGE>

PERFORMANCE TABLE

<TABLE>
<CAPTION>
---------------------------------------------------------------------
Average Annual Total
Returns (for the periods Past Past Life
ending December 31, 1998) One Year 5 Years Of Fund
---------------------------------------------------------------------
<S> <C> <C> <C>
Fund Shares 35.44% 22.15% 19.18%
S&P 500 Index* 28.58% 24.06% 21.53%
---------------------------------------------------------------------
</TABLE>

* The S&P 500(R) Index, reflecting reinvestment of dividends, is an unmanaged
index of 500 leading stocks. S&P 500(R) Index is a registered trademark of
Standard & Poor's Corporation.

SELECT STRATEGIC GROWTH FUND
Sub-Adviser: Cambiar Investors, Inc.

Investment Objective: The Fund seeks long-term growth of capital by investing
primarily in common stocks of established companies.

Principal Risks:
. Company Risk
. Derivatives Risk
. Investment Management Risk
. Market Risk

GROWTH FUND
Sub-Adviser: Miller Anderson & Sherrerd, LLP

11
<PAGE>

Principal Risks:
. Company Risk
. Derivatives Risk
. Investment Management Risk
. Market Risk

YEARLY PERFORMANCE

[BAR CHART APPEARS HERE]

<TABLE>
<S> <C>
1989 25.64%

1990 -0.30%

1991 40.44%

1992 7.11%

1993 6.66%

1994 0.16%

1995 32.80%

1996 20.19%

1997 25.14%

1998 19.32%
</TABLE>

During the period shown above the highest quarterly return was 21.48% for the
quarter ended 12/31/98 and the lowest was 15.70% for the quarter ended 8/31/98.

PERFORMANCE TABLE

<TABLE>
<CAPTION>
--------------------------------------------------------------------
Average Annual Total
Returns (for the periods Past Past Past
ending December 31, 1998) One Year 5 Years 10 Years
--------------------------------------------------------------------
<S> <C> <C> <C>
Fund Shares 19.32% 19.01% 16.98%
S&P 500 Index* 28.58% 24.06% 19.20%
--------------------------------------------------------------------
</TABLE>

12
<PAGE>

* The S&P 500 Index(R), reflecting reinvestment of dividends, is an unmanaged
index of 500 leading stocks. S&P 500(R) Index is a registered trademark of
Standard & Poor's Corporation.

EQUITY INDEX FUND
Sub-Adviser: Allmerica Asset Management, Inc.

Principal Risks:
. Company Risk
. Derivatives Risk
. Market Risk

13
<PAGE>

YEARLY PERFORMANCE

[BAR CHART APPEARS HERE]
<TABLE>
<S> <C>
1991 29.16%
1992 7.25%
1993 9.53%
1994 1.06%
1995 36.18%
1996 22.30%
1997 32.41%
1998 26.33%
</TABLE>

During the period shown above the highest quarterly return was 22.00% for the
quarter ended 11/30/98 and the lowest was (11.93)% for the quarter ended
08/31/98.

PERFORMANCE TABLE

--------------------------------------------------------------------
</TABLE>

* The S&P 500(R) Index, reflecting reinvestment of dividends, is an unmanaged
index of 500 leading stocks. S&P 500(R) Index is a registered trademark of
Standard & Poor's Corporation.

SELECT GROWTH AND INCOME FUND
Sub-Adviser: J.P. Morgan Investment Management Inc.

Principal Investment Strategies: The Fund invests in a broadly diversified
portfolio of equity securities, primarily the common stock of companies included
in the S&P 500 Index. The Fund's industry diversification and other risk
characteristics will be similar to those of the index. The Fund may invest in a
wide range of equity securities, consisting of common stocks, preferred stocks,
securities convertible into common and preferred stocks and warrants. The Fund
may purchase individual stocks not presently paying dividends if the Sub-Adviser
believes the overall portfolio is positioned to achieve its income
objective.

14
<PAGE>

The Fund may invest up to 35% of its assets in fixed-income securities,
including up to 15% in "junk bonds". However, the Fund's normal strategy is to
be nearly fully invested in equity securities. The Fund may also invest up to
25% of its assets in foreign securities (not including its investments in ADRs).

Principal Risks:
. Company Risk
. Derivatives Risk
. Investment Management Risk
. Market Risk

YEARLY PERFORMANCE

[BAR CHART APPEARS HERE]

During the period shown above the highest quarterly return was 19.48% for the
quarter ended 11/30/98 and the lowest was (16.18)% for the quarter ended
08/31/98.

PERFORMANCE TABLE

<TABLE>
<CAPTION>
--------------------------------------------------------------------
Average Annual Total
Returns (for the periods Past Past Past
ending December 31, 1998) One Year 5 Years 10 Years
--------------------------------------------------------------------
<S> <C> <C> <C>
Fund Shares 16.43% 17.82% 15.53%
S&P 500 Index* 28.58% 24.06% 21.53%
--------------------------------------------------------------------
</TABLE>

* The S&P 500 Index(R), reflecting reinvestment of dividends, is an unmanaged
index of 500 leading stocks. S&P 500(R) Index is a registered trademark of
Standard & Poor's Corporation.

15
<PAGE>

SELECT INCOME FUND
Sub-Adviser: Standish, Ayer & Wood, Inc.

Investment Objective: The Fund seeks a high level of current income. The Fund
will invest primarily in investment grade, fixed-income securities.

Principal Investment Strategies: Examples of the types of securities in which
the Fund invests are corporate debt obligations such as bonds, notes and
debentures, and obligations convertible into common stock; commercial paper;
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities; and debt securities backed by various types of financial
assets. The Fund also may invest in mortgage-backed and asset-backed
securities. The Fund's investments in corporate debt securities are not limited
to any particular type of company or industry. The Fund may invest up to 25% of
its assets in foreign securities (not including its investments in ADRs), up to
35% of its assets in money market instruments and up to 25% in debt obligations
of supranational entities.

Principal Risks:
. Credit Risk
. Interest Rate Risk
. Investment Management Risk
. Liquidity Risk
. Market Risk
. Prepayment Risk

16
<PAGE>

YEARLY PERFORMANCE

[BAR CHART APPEARS HERE]

During the period shown above the highest quarterly return was 6.22% for the
quarter ended 02/28/93 and the lowest was (6.40)% for the quarter ended
04/30/94.

PERFORMANCE TABLE

<TABLE>
<CAPTION>
--------------------------------------------------------------------
Average Annual Total
Returns (for the periods Past Past Past
ending December 31, 1998) One Year 5 Years 10 Years
--------------------------------------------------------------------
<S> <C> <C> <C>
Fund Shares 6.83% 6.05% 6.56%
--------------------------------------------------------------------
Lehman Brothers 8.67% 7.27% 7.51%
Aggregate Bond Index*
--------------------------------------------------------------------
</TABLE>

INVESTMENT GRADE INCOME FUND
SUB-ADVISER: ALLMERICA ASSET MANAGEMENT, INC.

Investment Objective: The Fund seeks as high a level of total return, which
includes capital appreciation as well as income, as is consistent with prudent
investment management.

Principal Investment Strategies: To achieve its goal, the Fund invests in
investment grade debt securities and money market instruments such as bonds and
other corporate debt obligations; obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities, or money market instruments,
including commercial paper, bankers acceptances and negotiable certificates of
deposit. The Fund also may invest in mortgage-backed and asset-backed
securities. The Fund may invest up to 25% of its assets in foreign

17
<PAGE>

securities (not including its investments in ADRs) and up to 25% of its assets
in debt obligations of supranational entities.

Principal Risks:
. Credit Risk
. Interest Rate Risk
. Investment Management Risk
. Liquidity Risk
. Market Risk
. Prepayment Risk

YEARLY PERFORMANCE

[BAR CHART APPEARS HERE]

During the period shown above the highest quarterly return was 7.99% for the
quarter ended 07/31/89 and the lowest was (4.88)% for the quarter ended
04/30/94.

18
<PAGE>

PERFORMANCE TABLE

<TABLE>
<CAPTION>
--------------------------------------------------------------------
Average Annual Total
Returns (for the periods Past Past Past
ending December 31, 1998) One Year 5 Years 10 Years
--------------------------------------------------------------------
<S> <C> <C> <C>
Fund Shares 7.97% 6.95% 9.17%
--------------------------------------------------------------------
Lehman Brothers 8.67% 7.27% 9.26%
Aggregate Bond Index
--------------------------------------------------------------------
</TABLE>

GOVERNMENT BOND FUND
Sub-Adviser: Allmerica Asset Management, Inc.

Principal Risks:
. Credit Risk
. Interest Rate Risk
. Investment Management Risk
. Market Risk
. Prepayment Risk

19
<PAGE>

YEARLY PERFORMANCE

[BAR CHART APPEARS HERE]

During the period shown above the highest quarterly return was 5.48% for the
quarter ended 07/31/92 and the lowest was (2.74)% for the quarter ended
04/30/94.

PERFORMANCE TABLE

<TABLE>
<CAPTION>
--------------------------------------------------------------------
Average Annual Total
Returns (for the periods Past Past Past
ending December 31, 1998) One Year 5 Years 10 Years
--------------------------------------------------------------------
<S> <C> <C> <C>
Fund Shares 7.67% 5.99% 7.00%
--------------------------------------------------------------------
Lehman Brothers Intermediate 8.49% 6.45% 7.38%
Government Bond Index*
--------------------------------------------------------------------
</TABLE>

* The Lehman Brothers Intermediate Government Bond Index(R) is an unmanaged
index of U.S. Government and Agency bonds with remaining maturities of one to
ten years.

MONEY MARKET FUND
Sub-Adviser: Allmerica Asset Management, Inc.

Investment Objective: The Fund seeks to obtain maximum current income
consistent with preservation of capital and liquidity.

20
<PAGE>

invest up to 25% of its assets in U.S. dollar denominated foreign securities
(not including its investments in ADRs).

Principal Risks:

. Credit Risk
. Interest Rate Risk
. Investment Management Risk
. Market Risk

YEARLY PERFORMANCE

[BAR CHART APPEARS HERE]

During the period shown above the highest quarterly return was 9.44% for the
quarter ended 06/30/89 and the lowest was 2.91% for the quarter ended 07/31/93.

21
<PAGE>

PERFORMANCE TABLE

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Average Annual Total
Returns (for the periods Past Past Past
ending December 31, 1998) One Year 5 Years 10 Years
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Fund Shares 5.51% 5.22% 5.62%
- --------------------------------------------------------------------------------
IBC/Donoghue First Tier 4.96% 4.80% 5.22%
Money Market Index*
- --------------------------------------------------------------------------------
</TABLE>

EXPENSE SUMMARY

Fees and Expenses of the Funds
- ------------------------------

<TABLE>
<CAPTION>
Shareholder Annual Fund Operating Expenses Total Annual
Fees (expenses deducted from Fund assets) Fund
(fees paid directly Management Distribution Other Operating
from your investment) Fees (12b-1) Fees Expenses Expenses
--------------------- ------------- ------------- --------- ------------------
<S> <C> <C> <C> <C> <C>
Select Emerging Markets Fund @ None 1.35%* None 1.19% 2.54%(1),(2)*
Select Aggressive Growth Fund None 0.88% None 0.07% 0.95%(1),(2)
Select Capital Appreciation Fund None 0.94% None 0.10% 1.04%(1),(2)
Select Value Opportunity Fund None 0.91%(1)* None 0.08% 0.99%(1),(2)*
Select International Equity Fund None 0.90% None 0.12% 1.02%(1),(2)
Select Growth Fund None 0.81%** None 0.05% 0.86%(1),(2)**
Select Strategic Growth Fund @ None 0.85%* None 0.81% 1.66%(1),(2)*
Growth Fund None 0.44% None 0.05% 0.49%(1),(2)
Equity Index Fund None 0.29% None 0.07% 0.36%(1)
Select Growth and Income Fund None 0.68% None 0.05% 0.73%(1),(2)
Select Income Fund None 0.54% None 0.10% 0.64%(1)
Investment Grade Income Fund None 0.43% None 0.09% 0.52%(1)
Government Bond Fund None 0.50% None 0.14% 0.64%(1)
Money Market Fund None 0.26% None 0.06% 0.32%(1)
</TABLE>

@ The Select Emerging Markets Fund and Select Strategic Growth Fund commenced
operations on February 20, 1998. Expenses shown are annualized.

* Amount does not reflect a voluntary expense limitation currently in effect
for the Select Emerging Markets Fund, Select Value Opportunity Fund, and
Select Strategic Growth Fund. For the year ended December 31, 1998, the
Management Fees and Total Annual Fund Operating Expenses were 1.00% and
2.19%, respectively, for Select Emerging Markets Fund, 0.90% and 0.98%,
respectively, for Select Value

22
<PAGE>

Opportunity Fund, and 0.39% and 1.20%, respectively, for the Select
Strategic Growth Fund after the effect of the voluntary expense limitations.

(1) Until further notice, Allmerica Financial Investment Management Services,
Inc. (the "Manager") has declared a voluntary expense limitation of 1.35% of
average net assets for the Select Aggressive Growth Fund and Select Capital
Appreciation Fund, 1.25% for the Select Value Opportunity Fund, 1.50% for
the Select International Equity Fund, 1.20% for the Select Growth Fund and
Growth Fund, 1.10% for the Select Growth and Income Fund, 1.00% for the
Select Income Fund, Investment Grade Income Fund and Government Bond Fund,
and 0.60% for the Equity Index Fund and Money Market Fund. The total
operating expenses of these Funds of the Trust were less than their
respective expense limitations throughout 1998.

Until further notice, the Manager has declared a voluntary expense
limitation of 1.20% of average daily net assets for the Select Strategic
Growth Fund. In addition, the Manager has agreed to voluntarily waive its
management fee to the extent that expenses of the Select Emerging Markets
Fund exceed 2.00% of the Fund's average daily net assets. The amount of such
waiver shall not exceed the net amount of management fees earned by the
Manager from the Fund after subtracting fees paid by the Manager to the
Fund's Sub-Adviser.

(2) These Funds have entered into agreements with brokers whereby brokers rebate
a portion of commissions. Had these amounts been treated as reductions of
expenses, the total annual fund operating expense ratios would have been
2.19% for Select Emerging Market Fund, 0.92% for the Select Aggressive
Growth Fund, 1.02% for the Select Capital Appreciation Fund, 0.94% for the
Select Value Opportunity Fund, 1.01% for the Select International Equity
Fund, 0.84% for the Select Growth Fund, 1.14% for the Select Strategic
Growth Fund, 0.46% for the Growth Fund, and 0.70% for the Select Growth and
Income Fund.

Example
- -------

This Example is intended to help you compare the cost of investing in a Fund
with the cost of investing in other mutual funds.

23
<PAGE>

<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Select Value Opportunity Fund $ 99 $309 $536 $1,189
Select International Equity Fund $102 $318 $552 $1,223
Select Growth Fund $ 86 $269 $467 $1,039
Select Strategic Growth Fund $166 $515 $887 $1,933
Growth Fund $ 49 $154 $268 $ 602
Equity Index Fund $ 36 $113 $197 $ 445
Select Growth and Income Fund $ 73 $228 $398 $ 887
Select Income Fund $ 64 $200 $349 $ 781
Investment Grade Income Fund $ 52 $163 $284 $ 638
Government Bond Fund $ 64 $200 $349 $ 781
Money Market Fund $ 32 $101 $176 $ 397
</TABLE>

DESCRIPTION OF PRINCIPAL INVESTMENT RISKS

COMPANY RISK

A Fund's equity and fixed income investments in a company often fluctuate based
on:

. the firm's actual and anticipated earnings,

. changes in management, product offerings and overall financial strength

. and the potential for takeovers and acquisitions.

This is due to the fact that prices of securities react to the fiscal and
business conditions of the company that issued the securities. Factors
affecting a company's particular industry, such as increased production costs,
also may affect the value of its securities.

24
<PAGE>

CREDIT RISK

CURRENCY RISK

DERIVATIVES RISK

EMERGING MARKETS RISK

25
<PAGE>

significantly higher or lower rates of return than developed markets and usually
carry higher risks to investors than securities of companies in developed
countries.

FOREIGN INVESTMENT RISK

INTEREST RATE RISK

LIQUIDITY RISK

26
<PAGE>

INVESTMENT MANAGEMENT RISK

Investment management risk is the risk that a Fund does not achieve its
investment objective, even though the Sub-Adviser uses various investment
strategies and techniques.

MARKET RISK

This is the risk that the price of a security held by a Fund will fall due to
changing economic, political or market conditions or to factors affecting
investor psychology.

PREPAYMENT RISK

While mortgage-backed securities may have a stated maturity, their expected
maturities may vary when interest rates rise or fall. When interest rates fall,
homeowners are more likely to prepay their mortgage loans which may result in an
unforeseen loss of interest income to a Fund. Also, because prepayments
increase when interest rates fall, the prices of mortgage-backed securities does
not increase as much as other fixed income securities when interest rates fall.

OTHER INVESTMENT STRATEGIES

27
<PAGE>

Foreign Investments. (APPLICABLE TO EACH FUND EXCEPT THE GOVERNMENT BOND FUND)
- -------------------
Each Fund, except the Government Bond Fund, may invest all or a substantial part
of its portfolio in securities of companies that are located or primarily doing
business in a foreign country. A company is considered to be located in a
foreign country if it is organized under the laws of, or has a principal office
in, that country. A company is considered as primarily doing business in a
country if (i) the company derives at least 50% of its gross revenues or profits
from either goods or services produced or sold in the country or (ii) at least
50% of the company's assets are situated in the country. A Fund may invest in
foreign securities either directly or indirectly through the use of depositary
receipts, such as ADRs. Depositary receipts are generally issued by banks or
trust companies and evidence ownership of underlying foreign securities. An ADR
may be sponsored by the issuer of the underlying foreign security or it may be
issued in unsponsored form. The holder of a sponsored ADR is likely to receive
more frequent and extensive financial disclosure concerning the foreign issuer
than the holder of an unsponsored ADR and generally will bear lower transaction
charges. The Select Capital Appreciation Fund and Select International Equity
Fund may also purchase foreign securities through European Depositary Receipts
and Global Depositary Receipts.

Lending of Securities. (APPLICABLE TO ALL FUNDS) To realize additional income,
- ---------------------
the Funds may lend portfolio securities to broker-dealer or financial
institutions in an amount up to 33-1/3% of a Fund's total assets. While any
such loan is outstanding, a Fund will continue to receive amounts equal to the
interest or dividends paid by the issuer on the securities, as well as interest
(less any rebates to be paid to the borrower) on the investment of the
collateral or a fee from the borrower. Each Fund will have the right to call
each loan and obtain the securities. Lending portfolio securities involves
possible delays in receiving additional collateral or in the recovery of the
securities or possible loss of rights in the collateral.

28
<PAGE>

Board of Trustees determines that the restricted securities are liquid. The
Board of Trustees has adopted guidelines and delegated to the Manager the daily
function of determining and monitoring liquidity of restricted securities. The
Board, however, retains sufficient oversight and is ultimately responsible for
the determinations. This investment practice could increase the level of
illiquidity in a Fund if buyers lose interest in restricted securities. As a
result, a Fund might not be able to sell these securities when its Sub-Adviser
wants to sell, or might have to sell them at less than fair value. In addition,
market quotations for these securities are less readily available.

Temporary Defensive Strategies. At times a Sub-Adviser may determine that
- ------------------------------
market conditions make it desirable temporarily to suspend a Fund's normal
investment activities. This is when the Fund may temporarily invest in a
variety of lower-risk securities, such as U.S. Government and other high quality
bonds and short-term debt obligations. Such strategies attempt to reduce
changes in the value of the Fund's shares. The Fund may not achieve its
investment objective while these strategies are in effect.

MANAGEMENT OF THE FUNDS

The Trust is governed by a Board of Trustees. Allmerica Financial Investment
Management Services, Inc. is the investment Manager of the Trust responsible for
managing the Trust's day-to-day business affairs. The Manager is located at 440
Lincoln Street, Worcester, MA 01653. The Manager and its predecessor,
Allmerica Investment Management Company, Inc., have been managing mutual funds
since 1985. The Manager currently serves as investment manager to one other
mutual fund. Sub-Advisers have been hired to manage the investments of the
Funds. The Trust and Manager have obtained an order of exemption from the SEC
that permits the Manager to enter into and materially amend sub-advisory
agreements with non-affiliated Sub-Advisers without obtaining shareholder
approval. The Manager has ultimate responsibility to oversee Sub-Advisers. The
Manager has the ability, subject to approval of the Trustees, to hire and
terminate Sub-Advisers and to change materially the terms of the Sub-Adviser
Agreements, including the compensation paid to the Sub-Advisers, without the
approval of the shareholders of the Funds. The Sub-Advisers have been selected
by the Manager and Trustees with the help of BARRA RogersCasey, Inc., a pension
consulting firm. The fees earned by each Sub-Adviser and BARRA RogersCasey are
paid by the Manager. The performance by the Sub-Advisers is reviewed quarterly
by a committee of the Board of Trustees, with assistance from BARRA RogersCasey.

29
<PAGE>

The following table provides information about each Fund's Sub-Adviser:

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
FUND NAME,
SUB-ADVISER NAME AND ADDRESS EXPERIENCE
- -----------------------------------------------------------------------------------------------------------------------
<S> <C>
Select Emerging Markets Fund Organized in 1980 and has $27.1 billion assets under
- ----------------------------
Schroder Capital Management management as of December 31, 1998. Provides
International Inc. global equity and fixed income management services
787 Seventh Avenue to mutual funds and other institutional investors.
New York, NY 10019
- ------------------------------------------------------------------------------------------------------------------------
Select Aggressive Growth Fund Has over $31 billion assets under management as of
- -----------------------------
Nicholas-Applegate Capital Management, L.P. January 21, 1999. Founded in 1984. Clients
600 West Broadway, Suite 2900 include employee benefit and retirement plans,
San Diego, CA 92101 foundations, investment companies and individuals.
- ------------------------------------------------------------------------------------------------------------------------
Select Capital Appreciation Fund Manages with its affiliates assets totaling $148
- --------------------------------
T. Rowe Price Associates, Inc. billion as of December 31, 1998 for seven million
100 East Pratt Street individual and institutional investor accounts.
Baltimore, MD 21202 Founded in 1937.
- ------------------------------------------------------------------------------------------------------------------------
Select Value Opportunity Fund Established in 1973. Over $4.3 billion assets
- -----------------------------
Cramer Rosenthal McGlynn, LLC under management as of December 31, 1998.
707 Westchester Avenue Provides investment advice to mutual funds,
White Plains, NY 10604 individuals, government agencies, pension plans
and trusts.
- ------------------------------------------------------------------------------------------------------------------------
Select International Equity Fund Managed over $38 billion in global securities as
- --------------------------------
Bank of Ireland Asset Management (U.S.) Ltd. of December 31, 1998. Founded in 1966. Provides
26 Fitzwilliam Place, Dublin 2, Ireland and international investment management services.
20 Horseneck Lane
Greenwich, CT 06830
- ------------------------------------------------------------------------------------------------------------------------
Select Growth Fund As of December 31, 1998, $294 billion assets under
- ------------------
Putnam Investment Management, Inc. management, including affiliates. Investment
One Post Office Square manager of mutual funds and other clients since
Boston, MA 02109 1937.
- ------------------------------------------------------------------------------------------------------------------------
Select Strategic Growth Fund Began operations in 1973. Manages portfolios for
- ----------------------------
Cambiar Investors, Inc. corporations, pension plans and financial
8400 East Prentice Avenue institutions. As of December 31, 1998, $2.3
Suite 460 billion assets under management.
Englewood, CO 80111
- ------------------------------------------------------------------------------------------------------------------------
Growth Fund Organized in 1969. Provides investment advisory
- -----------
Miller Anderson & Sherrerd, LLP services to employee benefit plans, endowment
One Tower Bridge funds, foundations and other institutional
West Conshohocken, PA 19428 investors. $69 billion assets under management as
of December 31, 1998.
- ------------------------------------------------------------------------------------------------------------------------
Equity Index Fund Incorporated in 1993. $13.2 billion assets under
- -----------------
Allmerica Asset Management, Inc. management as of December 31, 1998. Serves as
440 Lincoln Street investment adviser to investment companies and
Worcester, MA 01653 affiliated insurance company accounts.
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>

30
<PAGE>

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
FUND NAME,
SUB-ADVISER NAME AND ADDRESS EXPERIENCE
- ------------------------------------------------------------------------------------------------------------------
<S> <C>
Select Growth and Income Fund Incorporated in 1984. With affiliates, over $300
- -----------------------------
J.P. Morgan Investment Management Inc. billion assets under management as of December
522 Fifth Avenue 31, 1998. Serves as investment adviser for
New York, NY 10036 employee benefit plans and other institutional
assets, as well as mutual funds and variable
annuities.
- ------------------------------------------------------------------------------------------------------------------
Select Income Fund Founded in 1933. $46 billion in assets under
- ------------------
Standish, Ayer & Wood, Inc. management. Manages portfolios for pension plans,
One Financial Center financial institutions and endowment and
Boston, MA 02111 foundation funds.
- ------------------------------------------------------------------------------------------------------------------
Investment Grade Income Fund See Equity Index Fund above
- ----------------------------
Allmerica Asset Management, Inc.
440 Lincoln Street
Worcester, MA 01653
- ------------------------------------------------------------------------------------------------------------------
Government Bond Fund See Equity Index Fund above
- --------------------
Allmerica Asset Management, Inc.
440 Lincoln Street
Worcester, MA 01653
- ------------------------------------------------------------------------------------------------------------------
Money Market Fund See Equity Index Fund above
- -----------------
Allmerica Asset Management, Inc.
440 Lincoln Street
Worcester, MA 01653
- ------------------------------------------------------------------------------------------------------------------
</TABLE>

For a sample listing of certain of the Sub-Advisers' clients, see "Investment
Management and Other Services" in the SAI.
The following individuals or groups of individuals are primarily responsible for
the day-to-day management of the Funds' portfolios:

<S> <C> <C> <C>
Select Emerging Markets Fund John A. Troiano, Chief Executive and 1981 - Present Joined SCMI as an investment analyst
- ----------------------------
Schroder Capital Management Chairman of Emerging Markets Committee specializing in engineering and
International Inc. ("SCMI") technology; In 1989 set up
SCMI's Latin American team.

Mark Bridgeman, First Vice President 1990 - Present Joined SCMI in 1990 and is Fund Manager

specializing in African markets.

31
<PAGE>

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
FUND NAME AND SUB-ADVISER NAME AND TITLE OF SERVICE WITH BUSINESS EXPERIENCE
NAME PORTFOLIO MANAGER(S) SUB-ADVISER FOR PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Select Aggressive Growth Fund Lawrence S. Speidell, Partner 1994 - Present Director of Global/Systematic
- ----------------------------- Portfolio Management and Research at
Nicholas-Applegate Capital NACM. Prior to joining NACM, he
Management, L.P. ("NACM") spent ten years with Batterymarch
Financial Management.

John J. Kane, Partner 1994 - Present Senior Portfolio Manager for the
U.S. Systematic portfolios at NACM.
Prior to joining NACM in 1994, he
was employed by ARCO Investment
Management Company and General
Electric.

Mark W. Stuckelman, Portfolio 1995 - Present Portfolio Manager for the U.S.
Manager Systematic portfolios at NACM.
Prior to joining NACM, he was
employed for five years with Wells
Fargo Bank, Fidelity Management
Trust Co., and BARRA, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Select Capital Appreciation Fund Brian W.H. Berghuis, Chartered 1986 - Present He has fifteen years experience
- -------------------------------- Financial Analyst in equity research and portfolio
T. Rowe Price Associates, Inc. ("T. management. He is head of the
Rowe Price") investment team for the Fund.

John F. Wakeman, Research Analyst 1990 - Present He spent nine years with T. Rowe
& Portfolio Manager Price as a research analyst and
portfolio manager and has eleven
years' experience in equity research.

Marc L. Baylin, Chartered Financial 1993 - Present He has seven years of investment
Analyst experience in equity research and has
been with T. Rowe Price for the past
five years as a Research Analyst.
- ------------------------------------------------------------------------------------------------------------------------------------
Select Value Opportunity Fund Ronald H. McGlynn, CEO and 1995 - Present He joined Cramer Rosenthal in 1973,
- -----------------------------
Cramer, Rosenthal, McGlynn, LLC President of Cramer Rosenthal has 29 years of investment experience
("Cramer Rosenthal") and serves as Co-Chief Investment
Officer and Portfolio Manager.

Eileen M. Fitzsimons, Vice 1996 - Present Prior to 1996, she was Managing
President and Portfolio Manager Director with Dreman Value Advisors,
Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

32
<PAGE>

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
FUND NAME AND SUB-ADVISER NAME NAME AND TITLE OF SERVICE WITH BUSINESS EXPERIENCE
PORTFOLIO MANAGER(S) SUB-ADVISER FOR PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Select International Equity Fund Christopher Reilly, Chief Investment 1980 - Present Since 1985, he has had
- -------------------------------- overall responsibility for
Bank of Ireland Asset Management Officer asset management. He
(U.S.) Limited ("BIAM") previously worked in the
United Kingdom in
stockbrokering and investment
management.

Denis Donovan, Director-Portfolio 1985 - Present Prior to joining BIAM , he
Manager spent more than 13 years in
the money market and foreign
exchange operations of the
Central Bank of Ireland. At
present, he has overall
responsibility for the
portfolio management function
for all of BIAM's client base.

Peter Wood 1985 - Present Prior to 1985, he spent five
years with another leading
investment management firm.
He is now responsible for
portfolio construction at BIAM.

Jane Neill, Senior Equity Analyst 1994 - Present Previously, she was Chief
Investment Officer with
another leading Irish
investment management firm.
- ------------------------------------------------------------------------------------------------------------------------------------
Select Growth Fund Carol C. McMullen, Chief Investment 1995 - Present Prior to 1995, Ms. McMullen
- ------------------ was Senior Vice President of
Putnam Investment Management, Officer, Global Growth Equities Baring Asset Management.
Inc. ("Putnam")
C. Beth Cotner, CFA and Chief 1995 - Present Prior to 1995, Ms. Cotner was
Investment Officer Executive Vice President at
Kemper Financial Services.

Manual Weiss, CFA and Senior Vice 1987 - Present He has been an investment
President professional with Putnam since
1987.
- ------------------------------------------------------------------------------------------------------------------------------------
Select Strategic Growth Fund Michael S. Barish, CFA and President 1973 - Present He founded Cambiar in 1973 and
- ---------------------------- has 36 years of investment
Cambiar Investors, Inc. ("Cambiar") experience. He is a generalist
and is responsible for the
consumer goods and healthcare
securities.

Kathleen M. McCarty, CFA, Senior 1987 - Present Prior to 1987, Ms. McCarty was
Vice President employed by Dain Bosworth as
Vice President of Research.
She is responsible for financial
services, communication services
and utilities securities.

Michael J. Gardner, CFA and Vice 1995 - Present Prior to 1995, Mr. Gardner was
President employed by Simmons & Co.
He is responsible for energy and
capital goods securities.

Brian M. Barish, CFA and Vice President 1997 - Present Prior to joining Cambiar in
1997, Mr. Barish was Vice
President at Lazard Freres & Co.
He is responsible for
technology-software, consumer
goods, transportation and
international securities.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

33
<PAGE>

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
FUND NAME AND SUB- NAME AND TITLE OF SERVICE WITH BUSINESS EXPERIENCE
ADVISER NAME PORTFOLIO MANAGER(S) SUB-ADVISER FOR PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Growth Fund Gary G. Schlarbaum, CFA and Managing 1987 - Present He has served on a committee
- -----------
Miller Anderson & Sherrerd, LLP Director of fund managers since 1993.
("MAS") Prior to 1987, Mr. Schlarbaum
was employed by First Chicago
Investment Advisors from
1984 - 1987.

Nicholas Kovich, CFA and Managing 1988 - Present He has served on the fund
Director Managers committee since 1988.
Prior to MAS, Mr. Kovich was
employed by Waddell & Reed
Asset Management Company from
1982 - 1988.

Robert J. Marcin, CFA and Managing 1988 - Present Prior to joining MAS in 1988,
Director Mr. Marcin was an Account
Executive at Smith Barney
Harris Upham and Company, Inc.

Brian Kramp, CFA and Vice President 1997 - Present Mr. Kramp was employed as an
analyst and portfolio manager
by Meridian Investment
Company from 1985 - 1997.

James J. Jolinger, Principal 1994 - Present He served on the fund managers
committee since 1997. Prior
to 1994, Mr. Jolinger was
employed by Oppenheimer
Capital as an Equity Analyst
from 1987 to 1994.

Arden C. Armstrong, CFA and 1986 - Present Prior to joining MAS, Ms.
Managing Director Armstrong was employed by
Evans Economics, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Select Growth and Income Fund Bernard A. Kroll, Vice President 1996 - Present Prior to joining J.P. Morgan in
- ----------------------------- 1996, Mr. Kroll was an equity
J.P. Morgan Investment Management derivatives specialist at
Inc. ("J.P. Morgan") Goldman Sachs & Co., founded
his own software development
firm and options broker-dealer,
and managed several derivatives
businesses at Kidder, Peabody
& Co. He is a portfolio manager
in the Structured Equity Group.

34
<PAGE>

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
FUND NAME AND SUB- NAME AND TITLE OF SERVICE WITH BUSINESS EXPERIENCE
ADVISER NAME PORTFOLIO MANAGER(S) SUB-ADVISER FOR PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Select Income Fund Edward H. Ladd, Chairman and 1962 - Present He is the firm's economist
- ------------------
Standish, Ayer & Wood, Inc. ("SAW") Managing Director and also assists clients in
establishing investment
strategies. Mr. Ladd is a
Director of the Federal
Reserve Bank of Boston,
New England Electric System,

Greylock Management and
Harvard Management Corp.
and a member of SAW's
Executive Committee.

George W. Noyes, President and 1970 - Present He directs bond policy
Managing Director formulation and manages
institutional bond
portfolios at SAW. Mr.
Noyes is Vice Chairman of
the ICFA Research
Foundation and serves on
SAW's Executive Committee.

Dolores S. Driscoll, Managing Director 1974 - Present She manages fixed-income
portfolios with specific
emphasis on mortgage pass-
throughs and original issue
discount bonds. Ms.
Driscoll also serves on
SAW's Executive Committee.

Richard C. Doll, Manager 1984 - Present He is a portfolio manager
with research
responsibilities in
convertible bonds. Prior
to joining SAW, Mr. Doll
was a Vice President with
the Bank of New England.

Maria D. Furman, Vice President and 1976 - Present She is head of the
Director tax-exempt area and manages
insurance and pension fund
accounts. Ms. Furman
currently serves on SAW's
Executive Committee.
- ------------------------------------------------------------------------------------------------------------------------------------
Investment Grade Income Fund Lisa M. Coleman, CFA and Vice President 1994 - Present She was a Deputy Manager/
- ----------------------------
Allmerica Asset Management, Inc. Portfolio Manager in the
("AAM") global fixed income area
for Brown Brothers Harriman
& Company in New York prior
to joining AAM.
- ------------------------------------------------------------------------------------------------------------------------------------
Government Bond Fund Richard J. Litchfield, CFA and Vice 1995 - Present He was a mortgage-backed
- --------------------
Allmerica Asset Management, Inc. President securities analyst and
("AAM") trader at Keystone
Investments, Inc. prior to
- ------------------------------------------------------------------------------------------------------------------------------------
Equity Index Fund and Money Market John C. Donohue, Vice President 1995 - Present He was a portfolio manager
- ----------------------------------
Fund at CS First Boston
- ----
Allmerica Asset Management, Inc. Investment Management prior
("AAM") to joining AAM.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

For the fiscal year ended December 31, 1998, the Funds paid the Manager the fees
shown in the table below:

<TABLE>
<CAPTION>
FEE (AS A PERCENTAGE OF
FUND AVERAGE NET ASSETS)
- ---- ------------------
<S> <C>
Select Emerging Markets Fund............... 1.35%
Select Aggressive Growth Fund.............. 0.88%
Select Capital Appreciation Fund........... 0.94%
Select Value Opportunity Fund.............. 0.91%
Select International Equity Fund........... 0.90%
Select Growth Fund......................... 0.82%
</TABLE>

35
<PAGE>

<TABLE>
<CAPTION>
FEE (AS A PERCENTAGE OF
FUND AVERAGE NET ASSETS)
---- -------------------
<S> <C>
Select Strategic Growth Fund................. 0.85%
Growth Fund.................................. 0.44%
Equity Index Fund............................ 0.29%
Select Growth and Income Fund................ 0.68%
Select Income Fund........................... 0.54%
Investment Grade Income Fund................. 0.43%
Government Bond Fund......................... 0.50%
Money Market Fund............................ 0.26%
</TABLE>

For fiscal year ended December 31, 1998, the Manager paid each Sub-Adviser
aggregate fees as set forth below:

<TABLE>
<CAPTION>
FEE (AS A PERCENTAGE OF
SUB-ADVISER AVERAGE NET ASSETS)
----------- -------------------
<S> <C>
Schroder Capital Management International Inc. /(1)/
(Select Emerging Markets Fund).................................. 1.00%
Nicholas-Applegate Capital Management, L.P.
(Select Aggressive Growth Fund)................................. 0.51%
T. Rowe Price Associates, Inc. *
(Select Capital Appreciation Fund).............................. 0.52%
Cramer Rosenthal McGlynn, LLC
(Select Value Opportunity Fund)................................. 0.54%
Bank of Ireland Asset Management (U.S.) Limited
(Select International Equity Fund).............................. 0.33%
Putnam Investment Management, Inc.
(Select Growth Fund)............................................ 0.33%
Cambiar Investors, Inc. /(2)/
(Select Strategic Growth Fund).................................. 0.50%
Miller Anderson & Sherrerd, LLP
(Growth Fund)................................................... 0.21%
Allmerica Asset Management, Inc.
(Equity Index Fund)............................................. 0.10%
John A Levin & Co., Inc.
(Select Growth and Income Fund)................................. 0.30%
Standish, Ayer & Wood, Inc.
(Select Income Fund)............................................ 0.20%
Allmerica Asset Management, Inc.
(Investment Grade Income Fund).................................. 0.20%
Allmerica Asset Management, Inc.
(Government Bond Fund).......................................... 0.20%
Allmerica Asset Management, Inc.
(Money Market Fund)............................................. 0.10%
</TABLE>

- ---------------------------------------------------
/(1)/ The Select Emerging Markets Fund began operations on February 20, 1998.
For its services, Schroder Capital Management International Inc. will
receive a fee computed daily at an annual rate based on the average daily
net assets of the Select Emerging Markets Fund, under the following
schedule:

36
<PAGE>

ASSETS RATE
------ ----
First $50 Million......................... 1.00%
Next $50 Million.......................... 0.85%
Next $150 Million......................... 0.75%
Over $250 Million......................... 0.60%

ASSETS RATE
------ ----
First $50 Million......................... 0.50%
Next $100 Million......................... 0.45%
Next $100 Million......................... 0.35%
Next $100 Million......................... 0.30%
Over $350 Million......................... 0.25%

ASSETS RATE
------ ----
First $100 Million........................ 0.60%
Over $100 Million......................... 0.55%
Next $250 Million......................... 0.50%
Over $500 Million......................... 0.45%

T. Rowe Price Associates, Inc. receives a fee computed daily at an annual rate
of 0.50% based on the average daily net assets of the Select Capital
Appreciation Fund.

** J.P. Morgan Investment Management Inc. replaced John A. Levin & Co., Inc. as
Sub-Adviser of the Select Growth and Income Fund on April 1, 1999.

PRICING OF FUND SHARES

37
<PAGE>

Market Fund are valued at amortized cost. Debt obligations in the other Funds
with a remaining maturity of 60 days or less are valued at amortized cost when
amortized cost is considered to represent fair value. Values for short-term
obligations of the other Funds having a remaining maturity of more than 60 days
are based upon readily available market quotations.

PURCHASE AND REDEMPTION OF SHARES

DISTRIBUTIONS AND TAXES

Distributions
- -------------

38
<PAGE>

annually in the case of the Select Emerging Markets Fund, Select Aggressive
Growth Fund, Select Capital Appreciation Fund, Select Value Opportunity Fund,
Select International Equity Fund, Select Growth Fund and Select Strategic Growth
Fund; and daily in the case of the Money Market Fund. Distributions of net
capital gains for the year, if any, are made annually. All dividends and capital
gain distributions are applied to purchase additional Fund shares at net asset
value as of the payment date. Fund shares are held by the Separate Accounts and
any distributions are reinvested automatically by the Separate Accounts.

Taxes
- -----

YEAR 2000

- ----------------------------
The conversion of certain European currencies to the "euro" may present
additional risks to those Funds exposed to such currencies.

39
<PAGE>

FINANCIAL HIGHLIGHTS

[Sample format]
The Fund
- ---------------

Net Asset Value, End of Period
Total Return
- ------------
................................................................................

Ratios/Supplemental Data
- ------------------------

Net Assets, End of Period
Ratios of Expenses to Average Net Assets
Ratios of Net Income to Average Net Assets
Portfolio Turnover Rate

40
<PAGE>

[Back Cover]

ALLMERICA INVESTMENT TRUST

Select Emerging Markets Fund
Select Aggressive Growth Fund
Select Capital Appreciation Fund
Select Value Opportunity Fund
Select International Equity Fund
Select Growth Fund
Select Strategic Growth Fund
Growth Fund
Equity Index Fund
Select Growth and Income Fund
Select Income Fund
Investment Grade Income Fund
Government Bond Fund
Money Market Fund

440 Lincoln Street
Worcester, Massachusetts 01653
(508) 855-1000

41
<PAGE>

APPENDIX A
----------

INVESTMENT TECHNIQUES AND STRATEGIES
- ------------------------------------

In managing its portfolios of investments, the Trust may make use of the
following investment techniques and strategies:

SYMBOLS
- -------
. Permitted
- --- Not Permitted

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
SELECT EMERGING SELECT AGGRESSIVE SELECT CAPITAL SELECT VALUE SELECT INTERNATIONAL
INVESTMENT TECHNIQUE/STRATEGY MARKETS FUND GROWTH FUND APPRECIATION FUND OPPORTUNITY FUND EQUITY FUND
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Asset-Backed Securities --- --- --- --- ---
Financial Futures Contracts
and Related Options . . . . .
Foreign Securities . . . . .
Forward Commitments --- --- . --- ---
Forward Contracts on Foreign Currencies . --- . --- .
High Yield Securities . --- . --- ---
Investments in Money Market Securities . . . . .
Mortgage-Backed Securities --- --- --- --- ---
Purchasing Options . . . . .
Repurchase Agreements . . . . .
Restricted Securities . . . . .
Reverse Repurchase Agreements --- --- . --- ---
Securities Lending . . . . .
Stand-By Commitments --- --- --- --- ---
Stripped Mortgage-Backed Securities --- --- --- --- ---
Swap and Swap-Related Products --- --- . --- ---
When-Issued Securities . . . . .
Writing Covered Options . . . . .
- ------------------------------------------------------------------------------------------------------------------------------------

<CAPTION>
--------------------------------------------------------------------------------------------
SELECT GROWTH SELECT STRATEGIC EQUITY SELECT GROWTH SELECT INCOME
INVESTMENT TECHNIQUE/STRATEGY FUND GROWTH FUND GROWTH FUND INDEX FUND AND INCOME FUND FUND
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Asset-Backed Securities --- --- . --- . .
Financial Futures Contracts
and Related Options . . . . . .
Foreign Securities . . . . . .
Forward Commitments --- --- --- --- --- .
Forward Contracts on Foreign Currencies . --- --- --- --- .
High Yield Securities . --- --- --- . .
Investments in Money Market Securities . . . . . .
Mortgage-Backed Securities --- --- --- --- --- .
Purchasing Options . . . . . .
Repurchase Agreements . . . . . .
Restricted Securities . . . . . .
Reverse Repurchase Agreements --- --- --- --- --- ---
Securities Lending . . . . . .
Stand-By Commitments --- --- --- --- --- .
Stripped Mortgage-Backed Securities --- --- --- --- --- .
Swap and Swap-Related Products --- --- --- --- --- ---
When-Issued Securities . . . . . .
Writing Covered Options . . . . . .
- ------------------------------------------------------------------------------------------------------------------------------------

<CAPTION>
-------------------------------------------------
INVESTMENT GRADE GOVERNMENT BOND MONEY MARKET
INVESTMENT TECHNIQUE/STRATEGY INCOME FUND FUND FUND
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Asset-Backed Securities . . .
Financial Futures Contracts
and Related Options . . ---
Foreign Securities . --- .
Forward Commitments . . .
Forward Contracts on Foreign Currencies --- --- ---
High Yield Securities --- --- ---
Investments in Money Market Securities . . .
Mortgage-Backed Securities . . ---
Purchasing Options . . ---
Repurchase Agreements . . .
Restricted Securities . . .
Reverse Repurchase Agreements --- --- ---
Securities Lending . . .
Stand-By Commitments . . .
Stripped Mortgage-Backed Securities . . ---
Swap and Swap-Related Products --- --- ---
When-Issued Securities . . .
Writing Covered Options . . ---
- -----------------------------------------------------------------------------------------
</TABLE>
<PAGE>

ALLMERICA INVESTMENT TRUST
STATEMENT OF ADDITIONAL INFORMATION

SELECT EMERGING MARKETS FUND
SELECT AGGRESSIVE GROWTH FUND
SELECT CAPITAL APPRECIATION FUND
SELECT VALUE OPPORTUNITY FUND
SELECT INTERNATIONAL EQUITY FUND
SELECT GROWTH FUND
SELECT STRATEGIC GROWTH FUND
GROWTH FUND
EQUITY INDEX FUND
SELECT GROWTH AND INCOME FUND
SELECT INCOME FUND
INVESTMENT GRADE INCOME FUND
GOVERNMENT BOND FUND
MONEY MARKET FUND

THIS STATEMENT OF ADDITIONAL INFORMATION ("SAI") IS NOT A PROSPECTUS. IT
SHOULD BE READ IN CONJUNCTION WITH THE APPLICABLE PROSPECTUS OF ALLMERICA
INVESTMENT TRUST DATED MAY 1, 1999. A FREE COPY OF THE APPLICABLE PROSPECTUS MAY
BE OBTAINED FROM ALLMERICA INVESTMENT TRUST (THE "TRUST"), 440 LINCOLN STREET,
WORCESTER, MASSACHUSETTS 01653, (508) 855-1000.

The Trust's Financial Statements and related notes and the report of the
independent accountants for the fiscal year ended December 31, 1998 are
incorporated by reference into this SAI and are included in the Trust's Annual
Report to Shareholders. The Annual Report to Shareholders is available, without
charge, upon request, by calling the following toll free number: 1-800.

DATED: MAY 1, 1999
<PAGE>

TABLE OF CONTENTS

<TABLE>
<S> <C>
TRUST HISTORY......................................................... 3

DESCRIPTION OF THE FUNDS AND THEIR INVESTMENTS AND RISKS.............. 3
INVESTMENT RESTRICTIONS AND POLICIES................................ 10
INVESTMENT STRATEGIES AND TECHNIQUES................................ 11
PORTFOLIO TURNOVER.................................................. 25

MANAGEMENT OF THE TRUST............................................... 25

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES................... 28

INVESTMENT MANAGEMENT AND OTHER SERVICES.............................. 28

BROKERAGE ALLOCATION AND OTHER PRACTICES.............................. 39

CAPITAL STOCK AND OTHER SECURITIES.................................... 41

PURCHASE, REDEMPTION AND PRICING OF SHARES............................ 42

TAXATION OF THE FUNDS OF THE TRUST.................................... 43

UNDERWRITERS.......................................................... 43

CALCULATION OF PERFORMANCE DATA....................................... 44

FINANCIAL STATEMENTS.................................................. 47
</TABLE>

2
<PAGE>

TRUST HISTORY

The Trust is an open-end, diversified series investment company designed to
provide the underlying investment vehicle for various separate investment
accounts established by First Allmerica Financial Life Insurance Company ("First
Allmerica") or Allmerica Financial Life Insurance and Annuity Company
("Allmerica Financial Life"), an indirect, wholly-owned subsidiary of First
Allmerica. Shares of the Trust are not offered to the general public but solely
to such separate investment accounts ("Separate Accounts"). Not all of the Funds
are offered to each Separate Account.

The Trust is a Massachusetts business trust established on October 11,
1984. It currently is comprised of fourteen different portfolios: Select
Emerging Markets Fund, Select Aggressive Growth Fund, Select Capital
Appreciation Fund, Select Value Opportunity Fund, Select International Equity
Fund, Select Growth Fund, Select Strategic Growth Fund, Growth Fund, Equity
Index Fund, Select Growth and Income Fund, Select Income Fund, Investment Grade
Income Fund, Government Bond Fund and Money Market Fund (each, a "Fund"). The
Trustees may create additional funds in the future.

DESCRIPTION OF THE FUNDS
AND THEIR INVESTMENTS AND RISKS

ADDITIONAL INFORMATION ABOUT THE FUNDS

For a description of the Funds' principal investment strategies and risks,
types of investments each Fund may acquire and certain investment techniques it
may utilize, see "Principal Investment Strategies and Risks" and "Other
Investment Strategies and Risks" in the appropriate Prospectus for the
underlying Funds of the applicable Separate Account. Following are descriptions
of additional Fund strategies, policies and restrictions. Note that any
percentage limitations listed under each Fund below apply at the time of
investment.

SELECT EMERGING MARKETS FUND

The Fund invests at least 65% of its total assets in equity securities of
companies that are domiciled or primarily doing business in developing countries
with emerging markets. A company is considered to be domiciled in a developing
country if it is organized under the laws of, or has a principal office in, that
country. A company is considered as primarily doing business in a developing
country if (i) the company derives at least 50% of its gross revenues or profits
from either goods or services produced or sold in the developing country or (ii)
at least 50% of the company's are situated in the developing country.

The Sub-Adviser may employ a temporary defensive strategy if deemed by it
to be appropriate due to economic or political conditions in emerging markets.
When using a defensive strategy, the Fund may invest up to 100% of its assets in
cash, high-quality debt securities or money market instruments of U.S. or
foreign issuers. In addition, most or all of its investment may be made in the
United States and in U.S. dollars for temporary defensive purposes.

The Fund may invest up to 15% of its net assets in securities which are
illiquid.

Investing in the Fund entails a substantial degree of risk. Investors are
strongly advised to consider carefully the special risks involved in investing
in emerging markets, which are in addition to the usual risks of investing in
developed countries around the world.

SELECT AGGRESSIVE GROWTH FUND

The selection of securities is made solely on the basis of their potential
for capital appreciation. Dividend and interest income from portfolio
securities, if any, is incidental to the Fund's investment objective.

At any given point, a substantial portion of the Fund's equity investments
may be in securities which are not listed for trading on national securities
exchanges and which, although publicly traded, may be less liquid than
securities issued

3
<PAGE>

by larger, more seasoned companies which trade on national securities exchanges.
Up to 15% of the Fund's net assets may be invested in securities which are
illiquid.

Because the price movement of the securities held by the Fund can be
expected to be more volatile than is the case for the market as a whole, and the
net asset value of a share of the Fund may fluctuate significantly, the Fund
should not be considered suitable for investors who are unable or unwilling to
assume the risk of loss inherent in an aggressive growth portfolio, nor should
investment in the Fund be considered a balanced or complete investment program.

When the Sub-Adviser of the Fund determines that market conditions warrant
a temporary defensive position, the Fund may invest without limitation in high-
grade, fixed income securities or U.S. Government securities, or hold assets in
cash or cash equivalents.

SELECT CAPITAL APPRECIATION FUND

Up to 15% of the Fund's net assets may be invested in securities which are
illiquid. When the Sub-Adviser of the Fund determines that market conditions
warrant a temporary defensive position, the Fund may invest without limitation
in high-grade, fixed income securities or U.S. Government securities, or hold
assets in cash or cash equivalents.

SELECT VALUE OPPORTUNITY FUND

The Fund may invest temporarily in preferred stocks, bonds and other
defensive issues. There are no restrictions or guidelines regarding the
investment of Fund assets in shares listed on an exchange or traded over-the-
counter. The Fund may invest up to 15% of its net assets in securities which are
illiquid.

The portfolio normally will be diversified among different industry
sectors, but is not an index approach. Stocks are bought as investments and
generally held for the long term, rather than as active trading vehicles.

SELECT INTERNATIONAL EQUITY FUND

The Fund may invest up to 15% of its net assets in securities which are
illiquid. When the Sub-Adviser of the Fund determines that market conditions
warrant a temporary defensive position, the Fund may invest without limitation
in high-grade, fixed income securities or U.S. Government securities, or hold
assets in cash or cash equivalents.

SELECT GROWTH FUND

Although the Fund may invest in dividend-paying stocks, the generation of
current income is not an objective of the Fund. Any income that is received is
incidental to the Fund's objective of long-term growth of capital.

When choosing securities for the portfolio, the Sub-Adviser for the Select
Growth Fund focuses on companies that display strong financial characteristics
and earnings growth potential.

The stocks of smaller growth companies may involve a higher degree of risk
than other types of securities and the price movement of such securities can be
expected to be more volatile than is the case of the market on the whole. The
Fund may hold stocks traded on one or more of the national exchanges as well as
in the over-the-counter markets. Because opportunities for capital growth may
exist not only in new and expanding areas of the economy but also in mature and
cyclical industries, the Fund's portfolio investments are not limited to any
particular type of company or industry.

When the Sub-Adviser determines that market conditions warrant a temporary,
defensive position, the Fund may invest without limitation in high-grade, fixed-
income securities or U.S. Government securities, or hold assets in cash or cash
equivalents. To the extent the Fund is so invested it is not achieving its
objective to the same degree as under normal conditions.

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The Select Growth Fund's objective of seeking long-term growth of capital
means that its assets generally will be subject to greater risk than may be
involved in investing in securities that are not selected for growth potential.
The Fund may invest up to 15% of its net assets in securities which are
illiquid.

SELECT STRATEGIC GROWTH FUND

Many of the stocks in the Fund's portfolio are expected to pay regular
dividends. However, in the evaluation of a company, greater consideration
normally is given to growth potential than to dividend income.

The Fund may invest up to 15% of its net assets in securities which are
illiquid.

The Fund at any time may hold a portion of its assets in cash or money
market instruments. When a defensive position is deemed advisable, the Fund may
temporarily invest without limit in high-grade debt securities, securities of
the U.S. Government and its agencies and money market instruments, or retain
cash.

The Fund is not restricted as to portfolio turnover and will make changes
in its portfolio from time to time based on market prices, economic conditions
and other factors.

GROWTH FUND

The Growth Fund proposes to keep its assets fully invested, but may
maintain reasonable amounts in cash or in high-grade, short-term debt securities
to meet current expenses and anticipated redemptions, and during temporary
periods pending investment in accordance with its policies.

In periods considered by management to warrant a more defensive position,
the Growth Fund may place a larger proportion of its portfolio in high-grade
preferred stocks, bonds or other fixed-income securities, including U.S.
Government securities, whether or not convertible into stock or with rights
attached, or retain cash.

The Growth Fund may invest in both listed and unlisted securities. The
Growth Fund also may invest in foreign as well as domestic securities.

The Fund may invest up to 15% of its net assets in securities which are
illiquid.

EQUITY INDEX FUND

The Equity Index Fund will attempt to replicate the investment results of
the Standard & Poor's 500 Composite Stock Price Index (the "S&P 500") while
minimizing transactional costs and other expenses. Stocks in the S&P 500 are
ranked in accordance with their statistical weighting from highest to lowest.
The method used to select investments for the Equity Index Fund involves
investing in common stocks in approximately the order of their weighting in the
S&P 500, beginning with those having the highest weighting. The Fund uses the
S&P 500 as the performance standard because it represents over 70 percent of the
total market value of all publicly-traded common stocks in the U.S., is well-
known to investors and, in the opinion of the Sub-Adviser, is representative of
the performance of common stocks publicly-traded in the United States. Many, but
not all, of the stocks in the S&P 500 are issued by companies that are among the
500 largest as measured by the aggregate market value of their outstanding stock
(market price per share multiplied by number of shares outstanding). Inclusion
of a stock in the S&P 500 does not imply that Standard & Poor's Ratings Service,
a division of McGraw-Hill Companies, Inc. ("S&P") has endorsed it as an
investment. With respect to investing in common stocks, there can be no
assurance of capital appreciation and there is a substantial risk of market
decline.

The Equity Index Fund's ability to duplicate the performance of the S&P 500
will be influenced by the size and timing of cash flows into or out of the Fund,
the liquidity of the securities included in the S&P 500, transaction and
operating expenses and other factors. These factors, among others, may result in
"tracking error," which is a measure of the degree to which the Fund's results
differ from the results of the S&P 500.

Tracking error is measured by the difference between total return for the
S&P 500 with dividends reinvested and total return for the Fund with dividends
reinvested after deductions of transaction and operating expenses. For the 12

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months ended December 31, 1998, the S&P 500 gained 28.58% versus a gain of
28.33% for the Equity Index Fund producing a tracking error of 0.25% before
advisory and administrative fees. Tracking error is monitored by the Sub-Adviser
on a regular basis. All tracking error deviations are reviewed to determine the
effectiveness of investment policies and techniques. If the tracking error
deviation exceeds industry standards for the Fund's asset size, the Sub-Adviser
will bring the deviation to the attention of the Trustees.

While the Board of Trustees of the Trust has selected the S&P 500 as the
index the Fund will attempt to replicate, the Trustees reserve the right to
select another index at any time without seeking shareholder approval if they
believe that the S&P 500 no longer represents a broad spectrum of common stocks
that are publicly traded in the United States or if there are legal, economic or
other factors limiting the use of any particular index. If the Trustees change
the index which the Equity Index Fund attempts to replicate, the Equity Index
Fund may incur significant transaction costs in switching from one index to
another.

The Equity Index Fund will invest only in those stocks, and in such
amounts, as its investment adviser determines to be necessary or appropriate for
the Equity Index Fund to approximate the S&P 500. As the size of the Equity
Index Fund increases, the Equity Index Fund may purchase a larger number of
stocks included in the S&P 500, and the percentage of its assets invested in
most stocks included in the S&P 500 will approach the percentage that each such
stock represents in the S&P 500. However, there is no minimum or maximum number
of stocks included in the S&P 500 which the Equity Index Fund will hold. Under
normal circumstances, it is expected that the Equity Index Fund will hold
approximately 500 different stocks included in the S&P 500. The Equity Index
Fund may compensate for the omission of a stock that is included in the S&P 500,
or for purchasing stocks in other than the same proportions that they are
represented in the S&P 500, by purchasing stocks which are believed to have
characteristics which correspond to those of the omitted stocks.

The Equity Index Fund may invest in short-term debt securities to maintain
liquidity or pending investment in stocks. Such investments will not be made for
defensive purposes or in anticipation of a general decline in the market price
of stocks in which the Equity Index Fund invests; investors in the Equity Index
Fund bear the risk of general declines in the stock markets. The Equity Index
Fund also may take advantage of tender offers, resulting in higher returns than
are reflected in the performance of the S&P 500. In addition, the Equity Index
Fund may hold warrants, preferred stocks and debt securities, whether or not
convertible into common stock or with rights attached, if acquired as a result
of in-kind dividend distributions, mergers, acquisitions or other corporate
activity involving the common stocks held by the Equity Index Fund. Such
investment transactions and securities holdings may result in positive or
negative tracking error.

The Equity Index Fund may purchase or sell futures contracts on stocks
indexes for hedging purposes and in order to achieve a fully invested position
while maintaining sufficient liquidity to meet possible net redemptions. The
effectiveness of a strategy of investing in stock index futures contracts will
depend upon the continued availability of futures contracts based on the S&P 500
or which tend to move together with stocks included in the S&P 500. The Equity
Index Fund would not enter into futures contacts on stock indexes for
speculative purposes.

The Equity Index Fund may invest up to 25% of its assets in foreign
securities (not including its investments in American Depositary Receipts
("ADRs")). The Equity Index Fund may invest up to 15% of its net assets in
securities which are illiquid.

Because of its policy of tracking the S&P 500, the Equity Index Fund is not
managed according to traditional methods of active investment management, which
involve the buying and selling of securities based upon investment analysis of
economic, financial and market factors. Consequently, the projected adverse
financial performance of a company normally would not result in the sale of the
company's stock and projected superior financial performance by a company
normally would not lead to an increase in the holdings of the company. From time
to time, the Sub-Adviser may make adjustments in the portfolio because of cash
flows, mergers, changes in the composition of the S&P 500 and other similar
reasons.

Standard & Poor's Corporation is not in any way affiliated with the Equity
Index Fund or the Trust. "Standard & Poor's," "Standard & Poor's 500," and "500"
are trademarks of Standard & Poor's Corporation.

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SELECT GROWTH AND INCOME FUND

To achieve its objective of long-term growth of capital and current income,
the Select Growth and Income Fund will invest primarily in dividend-paying
common stocks and securities convertible into common stocks. These may include
securities of large well-known companies as well as smaller growth companies.
The Fund may hold securities traded on one or more of the national exchanges as
well as in the over-the-counter markets. The Fund may purchase individual stocks
not presently paying dividends which offer opportunities for capital growth or
future income, provided that the Sub-Adviser believes the overall portfolio is
appropriately positioned to achieve its income objective. In certain
circumstances, fixed-income securities may be purchased by the Fund for long-
term growth potential.

The Fund may invest up to 15% of its net assets in securities which are
illiquid.

When the Sub-Adviser determines that market conditions warrant a temporary,
defensive position, the Fund may invest without limitation in high-grade, fixed-
income or U.S. Government securities, or hold assets in cash or cash
equivalents. To the extent the Fund is so invested, it is not achieving its
objective to the same degree as under normal conditions. There can be no
assurance of growth of capital, of course, and because the Fund invests a
substantial portion of its assets in common stocks and other securities which
fluctuate in value, there is substantial risk of market decline.

SELECT INCOME FUND

Investment grade corporate debt securities in which the Fund invests are:
(a) assigned a rating within the four highest grades (Baa/BBB or higher) by
either Moody's Investor Service, Inc. ("Moody's") or S&P, (b) equivalently rated
by another nationally recognized statistical rating organization ("NRSRO") or
(c) unrated securities but determined by the Sub-Adviser to be of comparable
quality. Securities rated in the fourth highest grade (rated Baa and BBB by
Moody's and S&P, respectively) are considered to have some speculative
characteristics. For more information concerning the rating categories of
corporate debt securities and commercial paper, see the Appendix to the SAI. The
types of securities in which the Fund invests include but are not limited to
U.S. dollar obligations of supranational entities such as the World Bank,
European Investment Bank and African Development Bank.

The dollar average weighted maturity of the portfolio, excluding money
market instruments, is expected to range between 5 and 20 years under normal
market conditions. Although the Fund does not invest for short-term trading
purposes, portfolio securities may be sold from time to time without regard to
the length of time they have been held. The value of the Fund's portfolio
securities generally will vary inversely with changes in prevailing interest
rates, declining as interest rates rise and increasing as rates decline. The
value will also be affected by other market and economic factors. There is the
risk with corporate debt securities that the issuers may not be able to meet
their obligations on interest and principal payments.

The Fund may invest up to 15% of its net assets in securities which are
illiquid.

Obligations in which the Select Income Fund may invest include debt
obligations of supranational entities. Supranational entities include
international organizations designated or supported by governmental entities to
promote economic reconstruction or development and international banking
institutions and related government agencies. Obligations of supranational
entities may be supported by appropriated but unpaid commitments of their member
countries, and there is no assurance that these commitments will be undertaken
or met in the future.

INVESTMENT GRADE INCOME FUND

The debt securities in which the Fund may invest are considered "investment
grade" in that they generally are suitable for purchase by prudent investors.
However, the lowest category of investment grade securities (rated Baa by
Moody's or BBB by S&P) may have speculative characteristics, such that changes
in economic conditions or other circumstances are more likely to lead to a
weakened capacity to make principal and interest payments than is the case of
debt securities with higher ratings. If the rating of a security falls below
investment grade, or an unrated security is deemed to have fallen below
investment grade, AAM analyzes relevant economic and market data in making a
determination of whether to retain or dispose of the investment. The performance
of the securities in the portfolio is monitored continuously, and they are
purchased and sold as conditions warrant and permit.

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The Fund may invest up to 15% of its net assets in securities which are
illiquid.

Obligations in which the Fund may invest include debt obligations of
supranational entities. Supranational entities include international
organizations designed or supported by governmental entities to promote economic
reconstruction or development and international banking institutions and related
government agencies. Obligations of supranational entities may be supported by
appropriated but unpaid commitments of their member countries, and there is no
assurance that these commitments will be undertaken or met in the future.

GOVERNMENT BOND FUND

The Government Bond Fund will invest in obligations issued or guaranteed by
the U.S. Government, its agencies and instrumentalities, and options and futures
thereon, as described in the Prospectus. Some U.S. Government securities are
backed by the full faith and credit of the United States. Other U.S. Government
securities are supported by (i) the right of the issuer to borrow from the U.S.
Treasury, (ii) discretionary authority of the U.S. Government to purchase the
obligations of the agency or instrumentality, or (iii) only the credit of the
instrumentality itself. No assurances can be given that the U.S. Government
would provide financial support to the U.S. Government sponsored
instrumentalities if it is not obligated to do so by law. The securities in
which the Government Bond Fund may invest include, but are not limited to, U.S.
Treasury bills, notes and bonds and obligations of the following: Banks for
Cooperatives, the Commodity Credit Corporation, the Federal Deposit Insurance
Corporation, Federal Farm Credit Banks, the Federal Financing Bank, Federal
National Mortgage Association, the General Insurance Fund, Government National
Mortgage Association, Government Services Administration (GSA Public Building
Trust Participation Certificates), the Production Credit Association, the
Student Loan Marketing Association, the Tennessee Valley Authority and the U.S.
Postal Service.

The Government Bond Fund may invest in mortgage-backed securities
(including pass-through securities) and participation certificates) of the
Government National Mortgage Association ("Ginnie Mae"), the Federal Home Loan
Mortgage Corporation ("Freddie Mac") and the Federal National Mortgage
Association ("Fannie Mae").

Ginnie Mae certificates are mortgage-backed securities representing part
ownership of a pool of mortgage loans. The mortgage loans are issued by lenders
such as mortgage bankers, commercial banks and savings and loan associations,
and are either insured by the Federal Housing Administration or guaranteed by
the Veterans Administration. After approval of the pool by Ginnie Mae,
certificates in the pool are offered to investors by securities dealers. Once
the pool has been approved by Ginnie Mae, the timely payment of interest and
principal on the certificates is guaranteed by the full faith and credit of the
U.S. Government. The certificates are "pass through" securities because a pro
rata share of regular interest and principal payments, as well as unscheduled
early prepayments, on the underlying mortgage pool is passed through monthly to
the Fund.

Freddie Mac, a corporate instrumentality of the U.S. Government created by
Congress to increase the availability of mortgage credit for residential
housing, issues participation certificates representing undivided interests in
Freddie Mac's mortgage portfolio. While Freddie Mac guarantees the timely
payment of interest and ultimate collection of the principal of its
participation certificates, the participation certificates are not backed by the
full faith and credit of the U.S. Government. The "pass-through" characteristics
of Freddie Mac participation certificates are similar to Ginnie Mae
certificates, but Freddie Mac certificates differ from Ginnie Mae certificates
in that Freddie Mac mortgages are primarily conventional residential mortgages
rather than mortgages issued or guaranteed by a federal agency or
instrumentality.

Fannie Mae is a federally chartered corporation owned by private
stockholders. Fannie Mae purchases both conventional and federally insured or
guaranteed residential mortgages form various entities, and packages pools of
such mortgages in the form of pass-through certificates. Fannie Mae guarantees
the timely payment of principal and interest. Fannie Mae is authorized to borrow
from the U.S. Treasury to meet its obligations, but the certificates are not
backed by the full faith and credit of the U.S. Government.

The effective maturity of a mortgage-backed security may be shortened by
unscheduled or early payments of principal and interest on the underlying
mortgages, which may affect their effective yield. When the Government Bond Fund
receives the monthly "pass-through" payments (which may include unscheduled
prepayments of principal) it may be able to invest the payments only at a lower
rate of interest. During periods of declining interest rates, such securities

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<PAGE>

therefore may be less effective as a means of "locking in" attractive long-term
interest rates and may have less potential for appreciation than conventional
bonds with comparable stated maturities.

The Fund may enter into repurchase agreements and, from time to time, may
have temporary investments in short-term debt obligations (including
certificates of deposit, bankers acceptances and commercial paper) pending the
making of other investments or for liquidity purposes.

The Fund may invest up to 15% of its net assets in securities which are
illiquid.

U.S. Government securities may be purchased or sold without regard to the
length of time they have been held to attempt to take advantage of short-term
differentials in yields, with the objective of seeking income while conserving
capital. While short-term trading increases portfolio turnover, the Government
Bond Fund incurs little or no brokerage costs for U.S. Government securities.

MONEY MARKET FUND

The Fund may invest in dollar-denominated obligations of foreign branches
of U.S. banks ("Euro dollars") and U.S. branches of foreign banks (if such U.S.
branches are subject to state banking requirements and Federal reserve reporting
requirements) which at the date of the investment have deposits of at least $1
billion as of their most recently published financial statements.

The Money Market Fund will not purchase any security unless (i) the
security has received the highest or second highest quality rating by at least
two NRSROs or by one NRSRO if only one has rated the security, or (ii) the
security is unrated and in the opinion of Allmerica Asset Management, Inc.
("AAM"), as Sub-Adviser to the Fund, in accordance with guidelines adopted by
the Trustees, is of a quality comparable to one of the two highest ratings of an
NRSRO. These standards must be satisfied at the time an investment is made. If
the quality of the investment later declines, the Fund may continue to hold the
investment, but the Trustees will evaluate whether the security continues to
present minimal credit risks.

INVESTMENT RESTRICTIONS AND POLICIES

The following is a description of certain restrictions on investments of
the Funds (in addition to those described in the Prospectus). The investment
restrictions numbered 1 through 9 are fundamental and may not be changed without
the approval of a majority in interest of the shareholders of that Fund. The
other investment restrictions are not deemed fundamental and may be changed by
the Trustees without shareholder approval. The following investment restrictions
apply to each Fund, except as noted:

1. The Fund will not issue "senior securities" as defined in Section
18(g) of the Investment Company Act of 1940 ("1940 Act").

2. The Fund will not borrow money, except in accordance with the
provisions of the 1940 Act and for temporary purposes when the aggregate amount
borrowed does not exceed 33?% of the value of the Fund's total assets at the
time such borrowing is made. In general, a borrowing shall be regarded as being
for temporary purposes if it is repaid within 60 days and is not extended or
renewed.

3. The Fund will not act as an underwriter except to the extent that, in
connection with the disposition of portfolio securities, it may be deemed to be
an underwriter under certain federal securities laws.

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<PAGE>

4. The Fund will not buy or sell real estate or interest in real estate,
although it may purchase and sell (a) securities which are secured by real
estate and (b) securities of companies which invest or deal in real estate.

5. The Fund will not engage in the purchase and sale of physical
commodities or contracts relating to physical commodities.

6. The Fund may make loans to other persons only through repurchase
agreements and securities lending. For purposes of this paragraph, the purchase
of an issue of publicly distributed bonds, debentures, or other debt securities,
whether or not the purchase was made upon the original issue of the securities,
is not to be considered the making of a loan by the Fund.

7. The Fund will not purchase securities on margin but may obtain such
short-term credits as are necessary for clearance transactions, and (except for
the Money Market Fund) may make margin payments in connection with financial
futures (including securities index futures) contracts, and options on such
future contracts and in the case of the Select Capital Appreciation Fund,
futures contracts on foreign currencies and related options. The Fund will not
participate on a joint or joint and several basis in any trading account in
securities or effect a short sale of securities.

*8. No Fund will concentrate its investments in particular industries,
including debt obligations of supranational entities and foreign governments,
but a Fund may invest up to 25% of the value of its total assets in a particular
industry. The restriction does not apply to investments in obligations issued
or guaranteed by the United States of America, its agencies or
instrumentalities, or to investments by the Money Market Fund in securities
issued or guaranteed by domestic branches of U.S. banks.

*9. As to 75% of the value of its total assets (100% for the Money Market
Fund), no Fund will invest more than 5% of the value of its total assets in the
securities of any one issuer (other than securities issued by or guaranteed as
to principal or interest by the United States Government or any agency or
instrumentality thereof) or acquire more than 10% of the voting securities of
any issuer. The remaining 25% of assets (other than for the Money Market Fund)
may be invested in the securities of one or more issuers without regard to such
limitations.

10. The Fund does not intend to invest in companies for the purpose of
exercising control or management.

11. The Fund may invest in the securities of one or more other investment
companies, subject to the provisions of the 1940 Act, as amended, any other
applicable laws or regulations and any applicable exemptive orders issued by the
Securities and Exchange Commission.

12. The Fund intends to purchase securities for investment and not to
purchase and sell them for trading purposes, except that the Select Capital
Appreciation Fund and the Government Bond Fund may engage in short term trading
of U.S. Government securities.

13. The Fund (except the Money Market Fund) may engage in transactions in
financial futures contracts and related options. The Money Market Fund will not
engage in transactions in financial futures or related options.

* These limitations apply as of the time of purchase. If through market
action the percentage limitations are exceeded, the Fund will not be required to
reduce the amount of its holdings in such investments.

INVESTMENT STRATEGIES AND TECHNIQUES

In managing its portfolios of investments, the Trust may make use of the
following investment strategies and techniques:

SECURITIES LENDING

Each Fund may loan its portfolio securities to broker-dealers pursuant to
agreements requiring that the loans be continuously secured by cash, cash
equivalents or securities issued or guaranteed by the United States government
or its agencies, or any combination of cash, cash equivalents and such
securities as collateral equal at all times to at least 102%

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of the market value of the securities loaned. Such loans are not made if, as a
result, the aggregate of all outstanding loans would exceed 33 1/3% of the value
of the Fund's total assets taken at current value. The Fund continues to receive
interest or dividends on the securities loaned, and simultaneously earns
interest on the investment of the loan collateral in U.S. Treasury securities,
certificates of deposit or other high-grade, short-term obligations or interest-
bearing cash equivalents or receives a fee from the borrower. Although voting
rights, or rights to consent, attendant to securities lent pass to the borrower,
such loans may be called at any time and may be called so that the securities
may be voted by the Fund if a material event affecting the investment is to
occur. There may be risks of delay in recovery of the securities or even loss of
rights in the collateral should the borrower of the securities fail financially.
However, loans are made only to firms deemed by the Fund's Sub-Adviser to be of
good standing, and when, in the judgment of the Fund's Sub-Adviser, the
consideration which can be earned currently from such securities loans justifies
the attendant risk.

FOREIGN SECURITIES

Each Fund except the Government Bond Fund may purchase foreign securities.
The Money Market Fund may invest only in U.S. dollar denominated foreign
securities. Accordingly, the relative strength of the U.S. dollar may be an
important factor in the performance of the Fund, depending on the extent of the
Fund's foreign investments. Securities of foreign issuers, particularly non-
governmental issuers, involve risks which are not associated ordinarily with
investing in domestic issuers. These risks include changes in currency exchange
rates and currency exchange control regulations. In addition, investments in
foreign countries could be affected by other factors generally not thought to be
present in the United States, including the unavailability of financial
information or the difficulty of interpreting financial information prepared
under foreign accounting standards, less liquidity and more volatility in
foreign markets, the possibility of expropriation, the possibility of heavy
taxation, the impact of political, social or diplomatic developments,
limitations on the removal of funds or other assets of a Fund, difficulties in
evoking legal process abroad and enforcing contractual obligations, and the
difficulty of assessing economic trends in foreign countries. Some foreign
securities exchanges may not be as developed or efficient as those in the United
States and securities traded on foreign securities exchanges generally are
subject to greater price volatility. There is also the possibility of adverse
changes in investment or exchange control regulations, expropriation or
confiscatory taxation and limitations on the removal of funds or other assets.

Investments in emerging countries involve exposure to economic structures
that are generally less diverse and mature than in the United States, and to
political systems which may be less stable. In addition, securities of issuers
located in emerging countries may have limited marketability and may be subject
to more abrupt or erratic price fluctuations. The risk also exists that an
emergency situation may arise in one or more emerging markets as a result of
which trading of securities may cease or may be substantially curtailed and
prices for a Fund's portfolio securities in such markets may not be readily
available. Many emerging market countries have experienced high rates of
inflation for many years. Inflation and rapid fluctuations in inflation rates
have had and may continue to have negative effects on the economies and
securities markets of certain countries with emerging markets. Emerging markets
generally are heavily dependent upon international trade and, accordingly, have
been and may continue to be affected adversely by trade barriers, exchange
controls, managed adjustments in relative currency values and other
protectionist measures imposed by the countries with which they trade. In
certain markets there have been times when settlements of securities
transactions have been unable to keep pace with the volume of securities
transactions, making it difficult to conduct such transactions.

The Funds may buy or sell foreign currencies, options on foreign currencies
and foreign currency futures contracts and options thereon and, in addition, the
Select Emerging Markets Fund, Select Capital Appreciation Fund, Select
International Equity Fund and Select Income Fund may invest in foreign currency
forward contracts. Although such instruments may reduce the risk of loss due to
a decline in the value of the currency that is sold, they also limit any
possible gain which might result should the value of the currency increase. Such
instruments will be used primarily to protect a Fund from adverse currency
movements; however, they also involve the risk that anticipated currency
movements will not be accurately predicted, thus adversely affecting a Fund's
total return. See "Financial Futures Contracts and Related Options" and "Forward
Contracts on Foreign Currencies."

The Funds' investments may include ADRs. For many foreign securities, there
are U.S. dollar-denominated ADRs which are traded in the United States on
exchanges or over the counter. ADRs represent the right to receive securities of
foreign issuers deposited in a domestic bank or a correspondent bank. An ADR may
be sponsored by the issuer of the underlying foreign security, or it may be
issued in unsponsored form. The holder of a sponsored ADR is likely to receive
more frequent and extensive financial disclosure concerning the foreign issuer
than the holder of an unsponsored ADR

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and generally will bear lower transaction charges. Each Fund may invest in both
sponsored and unsponsored ADRs. The Select International Equity Fund and the
Select Capital Appreciation Fund also may utilize European Depositary Receipts,
which are designed for use in European securities markets, and also may invest
in Global Depositary Receipts.

Obligations in which the Select Income Fund, Investment Grade Income Fund
and Government Bond Fund may invest include debt obligations of supranational
entities. Supranational entities include international organizations designated
or supported by governmental entities to promote economic reconstruction or
development and international banking institutions and related government
agencies. Obligations of supranational entities may be supported by appropriated
but unpaid commitments of their member countries, and there is no assurance that
these commitments will be undertaken or met in the future. A Fund may not invest
more than 25% of its assets in debt obligations of supranational entities.

Certain state insurance regulations may impose additional restrictions on a
Fund's holdings of foreign securities.

FORWARD COMMITMENTS

The Select Capital Appreciation Fund, Select Income Fund, Investment Grade
Income Fund, Government Bond Fund and Money Market Fund may enter into contracts
to purchase securities for a fixed price at a specified future date beyond
customary settlement time ("forward commitments"). If the Funds do so, they will
maintain cash or other liquid obligations having a value in an amount at all
times sufficient to meet the purchase price. Forward commitments involve a risk
of loss if the value of the security to be purchased declines prior to the
settlement date. Although the Funds generally will enter into forward
commitments with the intention of acquiring securities for their portfolio, they
may dispose of a commitment prior to settlement if their Sub-Adviser deems it
appropriate to do so. The Funds may realize short-term gains or losses upon the
sale of forward commitments. The Sub-Adviser will monitor the creditworthiness
of the parties to such forward commitments.

WHEN-ISSUED SECURITIES

Each Fund from time to time may purchase securities on a "when-issued"
basis or delayed delivery basis. Debt securities and municipal obligations often
are issued on this basis. The yield of such securities is fixed at the time a
commitment to purchase is made, with actual payment and delivery of the security
generally taking place 15 to 45 days later. During the period between purchase
and settlement, typically no payment is made by a Fund and no interest accrues
to the Fund. The market value of when-issued securities may be more or less than
the purchase price payable at settlement date. Purchase of when-issued
securities involves the risk that yields available in the market when delivery
occurs may be higher than those available when the when-issued order is placed
resulting in a decline in the market value of the security. There is also the
risk that under some circumstances the purchase of when-issued securities may
act to leverage the Fund. The Fund will establish a segregated account with the
Custodian in which it will maintain cash or liquid securities at least equal to
commitments for when-issued securities.

REPURCHASE AGREEMENTS AND REVERSE REPURCHASE AGREEMENTS

Each Fund may enter into repurchase agreements. Under a repurchase
agreement, a Fund may purchase an obligation of or guaranteed by the United
States Government, its agents or instrumentalities, with an agreement that the
seller will repurchase the obligation at an agreed upon price and date. The
repurchase price reflects an agreed-upon interest rate which is unrelated to the
coupon rate on the purchased obligation. Repurchase agreements usually are for
short periods, such as under one week, but may be as long as thirty days. No
repurchase agreement will be effected if, as a result, more than 30% of a Fund's
total assets taken at current value will be invested in repurchase agreements.
No more than 15% (10% for the Money Market Fund) of a Fund's total assets taken
at current value will be invested in repurchase agreements extending for more
than seven days and in other securities which are not readily marketable.

If a seller defaults upon the obligation to repurchase, the Funds may incur
a loss if the value of the purchased obligation (collateral) declines, and may
incur disposition costs in liquidating the collateral. If bankruptcy proceedings

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are commenced with respect to a seller, realization upon the collateral by the
Funds may be delayed or limited.

Prior to entering into a repurchase agreement, the Fund's Sub-Adviser
evaluates the creditworthiness of entities with which the Fund proposes to enter
into the repurchase agreement. The Trustees have established guidelines and
standards of review for the evaluation of creditworthiness by the Funds' Sub-
Advisers and monitor such Sub-Advisers' actions with respect to repurchase
transactions.

The Select Capital Appreciation Fund also may enter into reverse repurchase
agreements. In a reverse repurchase agreement, a fund sells a portfolio security
to another party, such as a bank or broker-dealer, in return for cash and agrees
to repurchase the instrument at a particular price and at a future date. Reverse
repurchase agreement transactions can be considered a form of borrowing by the
Fund. Reverse repurchase agreements may be used to provide cash to satisfy
unusually heavy redemption requests or for other temporary or emergency purposes
without the necessity of selling portfolio securities or to earn additional
income on portfolio securities, such as treasury bills and notes. While a
reverse repurchase agreement is outstanding, the Fund will maintain cash and
appropriate liquid assets in a segregated custodial account to cover its
obligation under the reverse repurchase agreement. The Select Capital
Appreciation Fund will enter into reverse repurchase agreements only with
parties that its Sub-Adviser deems creditworthy.

WRITING COVERED OPTIONS

Each Fund other than the Money Market Fund may write call options and put
options on securities which the Fund owns as its Sub-Adviser shall determine to
be appropriate and to the extent permitted by applicable law. A call option
gives the purchaser of the option the right to buy and a writer the obligation
to sell the underlying security at the exercise price at any time prior to the
expiration of the option, regardless of the market price of the security during
the option period. A premium is paid to the writer as the consideration for
undertaking the obligations under the option contract. The writer forgoes the
opportunity to profit from an increase in the market price of the underlying
security above the exercise price except insofar as the premium represents such
a profit.

As the writer of a call option, a Fund receives a premium for undertaking
the obligation to sell the underlying security at a fixed price during the
option period if the option is exercised. So long as the Fund remains obligated
as the writer of a call, it forgoes the opportunity to profit from increases in
the market price of the underlying security above the exercise price of the
option, except insofar as the premium represents such a profit, and retains the
risk of loss should the value of the security decline. The Fund also may enter
into "closing purchase transactions" in order to terminate its obligation as the
writer of a call option prior to the expiration of the option. There is no
assurance that a Fund will be able to effect such transactions at any particular
time or at any acceptable price.

The writer of a put option is obligated to purchase specified securities
from the option holder at a specified price at any time before the expiration
date of the option. The purpose of writing such options is to generate
additional income for the Fund, but the Fund accepts the risk that it will be
required to purchase the underlying securities at a price in excess of the
securities' market value at the time of purchase.

Option transactions may increase a Fund's transaction costs and may
increase the portfolio turnover rate, depending on how many options written by
the Fund are exercised in a particular year.

PURCHASING OPTIONS

Each Fund other than the Money Market Fund may purchase put and call
options to the extent permitted by applicable law. A Fund will not purchase put
or call options if after such purchase more than 5% of its net assets, as
measured by the aggregate of the premiums paid for all such options held by the
Fund, would be so invested. A Fund would also be able to enter into closing sale
transactions in order to realize gains or minimize losses on exchange traded
options purchased by the Fund.

A Fund normally would purchase call options in anticipation of an increase
in the market value of securities. The purchase of a call option entitles the
Fund, in return for the premium paid, to purchase specified securities at a
specified

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<PAGE>

price during the option period. If the value of such securities exceeded the sum
of the exercise price, the premium paid and transaction costs during the option
period, the Fund would ordinarily realize a gain, if not, the Fund would realize
a loss.

A Fund normally would purchase put options in anticipation of a decline in
the market value of securities in its portfolio ("protective puts") or
securities of the type in which it may invest. The purchase of a put option
would entitle the Fund, in exchange for the premium paid, to sell specified
securities at a specified price during the option period. Gains or losses on the
purchase of put options would tend to be offset by countervailing changes in the
value of underlying portfolio securities. A Fund ordinarily would realize a gain
if, during the option period, the value of the underlying securities decreased
below the exercise price sufficiently to cover the premium and transaction
costs; otherwise, the Fund would realize a loss on the purchase of the put
option.

There is no assurance that a liquid secondary market on an options exchange
will exist for a particular option or at a particular time. The hours of trading
for options on options exchanges may not conform to the hours during which the
underlying securities are traded. To the extent that the option markets close
before the markets for the underlying securities, significant price and rate
movements can take place in the underlying securities markets that cannot be
reflected in the option markets. In addition, the purchase of options is a
highly specialized activity which depends in part on the Sub-Adviser's ability
to predict future price fluctuations and the degree of correlation between the
options and securities markets. A Fund pays brokerage commission or spread in
connection with its options transactions as well as for purchases and sales of
the underlying securities.

FINANCIAL FUTURES CONTRACTS AND RELATED OPTIONS

Each Fund (other than the Money Market Fund) may invest in transactions in
financial futures contracts and related options for hedging purposes. In
addition, the Select Emerging Markets Fund, Select Capital Appreciation Fund,
Select International Equity Fund, Select Growth Fund and Select Income Fund may
utilize futures contracts on foreign currencies and related options. Through
certain hedging activities involving such futures contracts and related options,
it is possible to reduce the effects of fluctuations in interest rates and the
market prices of securities which may be quite volatile. Hedging is a means of
transferring a risk which an investor does not desire to assume during an
uncertain interest rate or securities market environment to another investor who
is willing to assume that risk.

The Select Emerging Markets Fund, Select Capital Appreciation Fund, Select
International Equity Fund, Select Growth Fund and Select Income Fund may buy and
write options on foreign currencies in a manner similar to that in which futures
or forward contracts on foreign currencies will be utilized. For example, a
decline in the U.S. dollar value of a foreign currency in which portfolio
securities are denominated will reduce the U.S. dollar value of such securities,
even if their value in the foreign currency remains constant. In order to
protect against such diminutions in the value of portfolio securities, the
Select Emerging Markets Fund, Select Capital Appreciation Fund, Select
International Equity Fund, Select Growth Fund and Select Income Fund may buy put
options on the foreign currency. If the value of the currency declines, the
Funds will have the right to sell such currency for a fixed amount in U.S.
dollars and will offset, in whole or in part, the adverse effect on its
portfolio.

Conversely, when a rise in the U.S. dollar value of a currency in which
securities to be acquired are denominated is projected, thereby increasing the
cost of such securities, the Select Emerging Markets Fund, Select Capital
Appreciation Fund, Select International Equity Fund, Select Growth Fund and
Select Income Fund may buy call options thereon. The purchase of such options
could offset, at least partially, the effects of the adverse movements in
exchange rates. As in the case of other types of options, however, the benefit
to the Funds from purchases of foreign currency options will be reduced by the
amount of the premium and related transaction costs. In addition, if currency
exchange rates do not move in the direction or to the extent desired, the Select
Emerging Markets Fund, Select Capital Appreciation Fund, Select International
Equity Fund, Select Growth Fund and Select Income Fund could sustain losses on
transactions in foreign currency options that would require such Funds to forgo
a portion or all of the benefits of advantageous changes in those rates.

The Select Emerging Markets Fund, Select Capital Appreciation Fund, Select
International Equity Fund, Select Growth Fund and Select Income Fund also may
write options on foreign currencies. For example, to hedge against a potential
decline in the U.S. dollar value of foreign currency denominated securities due
to adverse fluctuations in

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<PAGE>

exchange rates, the Funds could write a call option on the relevant currency
instead of purchasing a put option. If the expected decline occurs, the option
will most likely not be exercised and the diminution in value of portfolio
securities will be offset by the amount of the premium received.

Similarly, instead of purchasing a call option to hedge against a potential
increase in the U.S. dollar cost of securities to be acquired, the Select
Emerging Markets Fund, Select Capital Appreciation Fund, Select International
Equity Fund, Select Growth Fund and Select Income Fund could write a put option
on the relevant currency which, if rates move in the manner projected, will
expire unexercised and allow the Funds to hedge the increased cost up to the
amount of the premium. As in the case of other types of options, however, the
writing of a foreign currency option will constitute only a partial hedge up to
the amount of the premium. If exchange rates do not move in the expected
direction, the option may be exercised and the Funds would be required to buy or
sell the underlying currency at a loss which may not be offset by the amount of
the premium. Through the writing of options on foreign currencies, the Select
Emerging Markets Fund, Select Capital Appreciation Fund, Select International
Equity Fund, Select Growth Fund and Select Income Fund also may lose all or a
portion of the benefits which might otherwise have been obtained from favorable
movements in exchange rates.

The Select Emerging Markets Fund, Select Capital Appreciation Fund, Select
International Equity Fund, Select Growth Fund and Select Income Fund may write
covered call options on foreign currencies. A call option written on a foreign
currency by the Funds is "covered" if the Funds own the underlying foreign
currency covered by the call or have an absolute and immediate right to acquire
that foreign currency without additional cash consideration (or for additional
cash consideration held in a segregated account by the Fund's custodian) upon
conversion or exchange of other foreign currency held in their portfolios. A
call option also is covered if the Funds have a call on the same foreign
currency and in the same principal amount as the call written if the exercise
price of the call held (i) is equal to or less than the exercise price of the
call written or (ii) is greater than the exercise price of the call written, if
the difference is maintained by the Funds in cash or other liquid assets in a
segregated account with the Funds' custodian.

The Select Emerging Markets Fund, Select Capital Appreciation Fund, Select
International Equity Fund, Select Growth Fund and Select Income Fund also may
write call options on foreign currencies for cross-hedging purposes that would
not be deemed to be covered. A call option on a foreign currency is for cross-
hedging purposes if it is not covered but is designed to provide a hedge against
a decline due to an adverse change in the exchange rate in the U.S. dollar value
of a security that the Funds own or have the right to acquire and that is
denominated in the currency underlying the option. In such circumstances, the
Select Emerging Markets Fund, Select Capital Appreciation Fund, Select
International Equity Fund, Select Growth Fund and Select Income Fund
collateralize the option by segregating cash or other liquid assets in an amount
not less than the value of the underlying foreign currency in U.S. dollars
marked-to-market daily. The Select Emerging Markets Fund, Select Capital
Appreciation Fund, Select International Equity Fund, Select Growth Fund and
Select Income Fund may invest without limitation in foreign currency options.

GENERAL INFORMATION

A futures contract on a security is a standardized agreement under which
each party is entitled and obligated either to make or to accept delivery, at a
particular time, of securities having a specified face value and rate of return
on foreign currencies. Currently, futures contracts are available on debt and
equity securities and on certain foreign currencies.

Futures contracts are traded on exchanges that are licensed and regulated
by the Commodity Futures Trading Commission ("CFTC"). A futures contract on an
individual security may be deemed to be a commodities contract. A Fund engaging
in a futures transaction initially will be required to deposit and maintain with
its Custodian, in the name of its brokers, an amount of cash or U.S. Treasury
bills equal to a small percentage (generally less than 5%) of the contract
amount to guarantee performance of its obligations. This amount is known as
"initial margin." Margin in a futures transaction is different from margin in a
securities transaction, in that financial futures initial margin does not
involve the borrowing of funds to finance the transactions. Unlike securities
margin, initial margin in a futures transaction is in the nature of a
performance bond or good faith deposit on the contract which is returned to the
fund upon termination of the financial future, assuming all contractual
obligations have been satisfied. As the price of the underlying security
fluctuates, making the position in the financial futures more or less valuable,
subsequent payments called "maintenance margin" or "variation margin" are made
to and from the broker on a daily basis. This process is called "marking to
market."

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<PAGE>

The purchase and sale of financial futures is for the purpose of hedging
against changes in securities prices or interest rates. Hedging transaction
serve as a substitute for transactions in the underlying securities and can
effectively reduce investment risk. When prices are expected to rise, a fund,
through the purchase of futures contracts, can attempt to secure better prices
than might be later available in the stock market when it anticipates effecting
purchases.

Similarly, when interest rates are expected to increase, a fund can seek to
offset a decline in the value of its debt securities through the sale of futures
contracts.

OPTIONS ON FINANCIAL FUTURES

The Funds other than the Money Market Fund may use options on futures
contracts in connection with hedging strategies. The purchase of put options on
futures contracts is a means of hedging the Fund's portfolio against the risk of
declining prices. The purchase of a call option on a futures contract represents
a means of hedging against a market advance when a Fund is not invested fully.
Depending on the pricing of the option compared with either the futures contract
upon which it is based or upon the price of the underlying securities, the
option may or may not be less risky than ownership of the futures contract or
underlying securities.

The writing of a call option on a futures contract may constitute a partial
hedge against declining prices of the securities or currencies which are
deliverable upon exercise of the futures contract. If the futures price at
expiration is below the exercise price, a Fund will retain the full amount of
the option premium, which provides a partial hedge against any decline that may
have occurred in the Fund's holding of securities or currencies.

The writing of a put option on a futures contract is analogous to the
purchase of a futures contract. If the option is exercised, the net cost to the
Fund of the securities or currencies acquired by it will be reduced by the
amount of the option premium received. If, however, market prices have declined,
the Fund's purchase price upon exercise may be greater than the price at which
the securities or currencies might be purchased in the cash market.

LIMITATIONS ON PURCHASE AND SALE OF FUTURES AND RELATED OPTIONS

A Fund generally will engage in transactions in futures contracts or
related options only as a hedge against changes in the values of securities or
currencies held in a Fund's portfolio or which it intends to purchase, or to a
limited extent to engage in non-hedging strategies. A Fund may not purchase or
sell a futures contract for non-hedging purposes if immediately thereafter the
sum of the amount of margin deposits and amount of variation margins paid from
time to time on the Fund's existing futures and related options positions and
premiums paid for related options would exceed 5% of the market value of the
Fund's total assets. The reasons a Fund may engage in non-hedging strategies
include: to seek to enhance return and to adjust efficiently the Fund's overall
exposure to certain markets. In instances involving the purchase of futures
contracts or call options thereon or the writing of put options thereon by a
Fund, an amount of cash and cash equivalents, equal to the market value of the
futures contracts and related options (less any related margin deposits), will
be deposited in a segregated account with its custodian in the name of the
broker to collateralize the position, and thereby insure that the use of such
futures contracts and options is unleveraged.

In implementing a Fund's overall risk management strategy, it is possible
that its Sub-Adviser will choose not to engage in any futures transactions or
that appropriate futures contracts or related options may not be available. A
Fund will engage in futures transactions only for appropriate hedging, risk
management or non-hedging purposes. A Fund will not enter into any particular
futures transaction unless its Sub-Adviser determines that the particular
transaction demonstrates an appropriate correlation with the Fund's investment
objectives and portfolio securities.

RISK OF TRANSACTIONS IN FUTURES

The sale and purchase of futures contracts is a highly specialized activity
which involves investment techniques and risks different from those associated
with ordinary portfolio securities transactions. There are several risks in
connection with the use of financial futures by a Fund as a hedging device.

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<PAGE>

Successful use of financial futures by a Fund is subject to its Sub-
Adviser's ability to predict movements in the direction of interest rates or
securities prices and to assess other factors affecting markets for securities.
For example, a Fund may hedge against the possibility of an increase in interest
rates which would affect adversely the prices of debt securities held in its
portfolio. If prices of the debt securities increase instead, the Fund may lose
part or all of the benefit of the increased value of the hedged debt securities
because it may have offsetting losses in the futures positions. In addition, in
this situation, if the Fund has insufficient cash, it may have to sell
securities to meet the daily maintenance margin requirements. These sales may
be, but will not necessarily be, at increased prices to reflect the rising
market. The Fund may have to sell securities at a time when it may be
disadvantageous to do so.

Another risk arises because of the imperfect correlation between movements
in the price of the financial future and movements in the price of the
securities or currencies which are the subject of the hedge. First of all, the
hours of trading for futures contracts may not conform to the hours during which
the underlying assets are traded. To the extent that the futures markets close
before the markets for the underlying assets, significant price and rate
movements can take place in the underlying asset's market that cannot be
reflected in the futures markets. But even during identical trading hours, the
price of the future may move more than or less than the price of the assets
being hedged. While a hedge will not be fully effective if the price of the
future moves less that the price of the hedged assets, if the price of the
hedged assets has moved in an unfavorable direction, the Fund would be in a
better position than if it had not hedged at all. On the other hand, if the
price of the hedged assets has moved in a favorable direction, this advantage
may be offset partially by the price movement of the futures contract. If the
price of the futures moves more than the price of the asset, the Fund will
experience either a loss or a gain on the futures contract which will not be
completely offset by movements in the prices of the assets which are the subject
of the hedge.

In addition to the possibility that there may be an imperfect correlation
at all, between movements in the futures and the portion of the portfolio being
hedged, the market prices of the futures may be affected by certain other
factors. First, all participants in the futures market are subject to margin
deposit and maintenance requirements. Rather than meeting additional margin
deposit requirements, investors may close futures through offsetting
transaction, which could distort the normal relationship between securities or
currencies and futures markets. Secondly, from the point of view of speculators,
the deposit requirements in the futures market are less onerous than margin
requirements in the securities market. Therefore, increased participation by
speculators in the futures market may also cause temporary price or currency
distortions. Due to the possibility of price distortion in the futures market
and because of the imperfect correlation between movements in the prices of
securities or currencies and movements in the prices of futures, a correct
forecast of interest rate trends or market price movements by the Sub-Adviser
still may not result in a successful hedging transaction over a short time
frame.

Positions in futures contracts may be closed out only on an exchange or
board of trade which provides a secondary market for such futures. Although the
Funds intend to purchase or sell futures only on exchanges or boards of trade
where there appears to be an active secondary market, there is no assurance that
a liquid secondary market on an exchange or board of trade will exist for any
particular contract or at any particular time. Thus, it may not be possible to
close a futures position, and, in the event of adverse price movements, the Fund
would continue to be required to make daily cash payments of maintenance margin.
However, in the event futures have been used to hedge portfolio positions, such
underlying assets will not be sold until the futures can be terminated. In such
circumstances, an increase in the price of the underlying assets, if any, may
offset partially or completely losses on the future.

RISKS OF TRANSACTIONS IN OPTIONS ON FUTURES

There are several special risks relating to options on futures. First, the
ability to establish and close out positions in options is subject to the
maintenance of a liquid secondary market. A Fund will not purchase options on
futures on any exchange or board of trade unless, in the opinion of its Sub-
Adviser, the market for such options is developed sufficiently so that the risks
in connection with options on futures transactions are not greater than the
risks in connection with futures transactions. Compared with the purchase or
sale of futures, the purchase of call or put options on futures involves less
potential risk to the Fund because the maximum amount at risk is the premium
paid for the options (plus transaction costs). However, there may be
circumstances when the purchase of a call or put option on futures would result
in a loss to the Fund when the purchase or sale of a future would not, such as
when there is no movement in the price of the

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<PAGE>

underlying securities. The writing of an option on a futures contract involves
risks similar to those risks relating to the sale of futures contracts, as
described above under "Risks of Transactions in Futures."

An option position may be closed out only on an exchange or board of trade
which provides a secondary market for an option of the same series. Although a
Fund generally will purchase only those options for which there appears to be an
active secondary market, there is no assurance that a liquid secondary market
will exist for any particular option or at any particular time. It might not be
possible to effect closing transactions in particular options, with the result
that the Fund would have to exercise its options in order to realize any profit
and would incur transaction costs upon the sale of financial futures pursuant to
the exercise of put options.

Because of the risks and the transaction costs associated with hedging
activities, there can be no assurance that a Fund's portfolio will perform as
well as or better than a comparable fund that does not invest in futures
contracts or related options.

FORWARD CONTRACTS ON FOREIGN CURRENCIES

A forward contract is an agreement between two parties in which one party
is obligated to deliver a stated amount of a stated asset at a specified time in
the future and the other party is obligated to pay a specified invoice amount
for the assets at the time of delivery. The Select Emerging Markets Fund, Select
Capital Appreciation Fund, Select International Equity Fund, Select Growth Fund
and Select Income Fund may enter into forward contracts to purchase and sell
government securities, foreign currencies or other financial instruments.
Forward contracts generally are traded in an interbank market conducted directly
between traders (usually large commercial banks) and their customers. Unlike
futures contracts which are standardized contracts, forward contracts can be
drawn specifically to meet the needs of the parties that enter into them. The
parties to a forward contract may agree to offset or terminate the contract
before its maturity, or may hold the contract to maturity and complete the
contemplated exchange. The following discussion summarizes the Select Emerging
Markets Fund's, Select Capital Appreciation Fund's, Select International Equity
Fund's, Select Growth Fund's and Select Income Fund's principal uses of forward
currency exchange contracts ("forward currency contracts"). The Funds may enter
into a forward currency contract with the stated contract value of up to the
value of the Funds' assets. A forward currency contract is an obligation to buy
or sell an amount of a specified currency for an agreed price (which may be in
U.S. dollars or a foreign currency). The Select Emerging Markets Fund, Select
Capital Appreciation Fund, Select International Equity Fund, Select Growth Fund
and Select Income Fund will exchange foreign currencies for U.S. dollars and for
other foreign currencies in the normal course of business and may buy and sell
currencies through forward currency contracts in order to fix a price for
securities they have agreed to buy or sell ("transaction hedge"). The Select
Emerging Markets Fund, Select Capital Appreciation Fund, Select International
Equity Fund, Select Growth Fund and Select Income Fund also may hedge some or
all of their investments denominated in foreign currency against a decline in
the value of that currency relative to the U.S. dollar by entering into forward
currency contracts to sell an amount of that currency (or a proxy currency whose
performance is expected to replicate or exceed the performance of that currency
relative to the U.S. dollar) approximating the value of some or all of their
portfolio securities denominated in that currency ("position hedge") or by
participating in options or futures contracts with respect to the currency. The
Funds also may enter into a forward currency contract with respect to a currency
where the Funds are considering the purchase or sale of investments denominated
in that currency but have not yet selected the specific investments
("anticipatory hedge").

In any of these circumstances, the Select Emerging Markets Fund, Select
Capital Appreciation Fund, Select International Equity Fund, Select Growth Fund
and Select Income Fund may enter alternatively into a forward currency contract
to purchase or sell one foreign currency for a second currency that is expected
to perform more favorably relative to the U.S. dollar if their Sub-Advisers
believe there is a reasonable degree of correlation between movements in the two
currencies ("cross-hedge").

These types of hedges minimize the effect of currency appreciation as well
as depreciation, but do not eliminate fluctuations in the underlying U.S. dollar
equivalent value of the proceeds of or rates of return on such Funds' foreign
currency denominated portfolio securities. The matching of the increase in value
of a forward contract and the decline in the U.S. dollar equivalent value of the
foreign currency denominated asset that is the subject of the hedge generally
will not be precise. Shifting the Funds' currency exposure from one foreign
currency to another removes the Funds' opportunity to profit from increases in
the value of the original currency and involves a risk of increased losses to
the Funds if their Sub-Advisers' projections of future exchange

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<PAGE>

rates is inaccurate. Proxy hedges and cross-hedges may result in losses if the
currency used to hedge does not perform similarly to the currency in which
hedged securities are denominated. Unforeseen changes in currency prices may
result in poorer overall performance for the Select Emerging Markets Fund,
Select Capital Appreciation Fund, Select International Equity Fund, Select
Growth Fund and Select Income Fund than if they had not entered into such
contracts.

The Select Emerging Markets Fund, Select Capital Appreciation Fund, Select
International Equity Fund, Select Growth Fund and Select Income Fund will cover
outstanding forward currency contracts by maintaining liquid portfolio
securities denominated in or whose value is tied to the currency underlying the
forward contract or the currency being hedged. To the extent that the Select
Emerging Markets Fund, Select Capital Appreciation Fund, Select International
Equity Fund, Select Growth Fund and Select Income Fund are not able to cover
their forward currency positions with underlying portfolio securities, the
Funds' custodian will segregate cash or liquid assets having a value equal to
the aggregate amount of its commitments under forward contracts entered into
with respect to position hedges, cross-hedges and anticipatory hedges. If the
value of the securities used to cover a position or the value of segregated
assets declines, the Select Emerging Markets Fund, Select Capital Appreciation
Fund, Select International Equity Fund, Select Growth Fund and Select Income
Fund will find alternative cover or segregate additional cash or liquid assets
on a daily basis so that the value of the covered segregated assets will be
equal to the amount of the Funds' commitments with respect to such contracts. As
an alternative to segregating assets, the Select Emerging Markets Fund, Select
Capital Appreciation Fund, Select International Equity Fund, Select Growth Fund
and Select Income Fund may buy call options permitting it to buy the amount of
foreign currency being hedged by a forward sale contract or the Funds may buy
put options permitting them to sell the amount of foreign currency subject to a
forward buy contract.

While forward contracts currently are not regulated by the CFTC, the CFTC
may in the future assert authority to regulate forward contracts. In such event,
the Select Emerging Markets Fund's, Select Capital Appreciation Fund's, Select
International Equity Fund's, Select Growth Fund's and Select Income Fund's
ability to utilize forward contracts may be restricted. In addition, the Select
Emerging Markets Fund, Select Capital Appreciation Fund, Select International
Equity Fund, Select Growth Fund and Select Income Fund may not always be able to
enter into forward contracts at attractive prices and may be limited in their
ability to use these contracts to hedge portfolio assets.

SWAP AND SWAP-RELATED PRODUCTS

The Select Capital Appreciation Fund may enter into interest rate swaps,
caps, and floors on either an asset-based or liability-based basis, depending
upon whether it is hedging its assets or its liabilities, and will usually enter
into interest rate swaps on a net basis (i.e., the two payment streams are
netted out with the Fund receiving or paying, as the case may be, only the net
amount of the two payments). Interest rate swaps involve the exchange by the
Fund with another party of their respective commitments to pay or receive
interest; for example, an exchange of floating rate payments for fixed rate
payments with respect to a notional amount of principal. A currency swap is an
agreement to exchange cash flows on a notional amount of two or more currencies
based on the relative value differential among them. An index swap is an
agreement to swap cash flows on a notional amount based on changes in the values
of the reference indices. The purchase of a cap entitles the purchaser to
receive payments on a notional principal amount from the party selling such cap
to the extent that a specified index exceeds a predetermined interest rate or
amount. The purchase of a floor entitles the purchaser to receive payments on a
notional principal amount from the party selling such floor to the extent that a
specified index falls below a predetermined interest rate or amount.

The net amount of the excess, if any, of the Fund's obligations over its
entitlement with respect to each interest rate swap will be calculated on a
daily basis and an amount of cash or other liquid assets having an aggregate net
asset value at least equal to the accrued excess will be maintained in a
segregated account by the Fund's custodian. If the Fund enters into an interest
rate swap on other than a net basis, it will maintain a segregated account in
the full amount accrued on a daily basis of its obligations with respect to the
swap. The Fund will not enter into any interest rate swap, cap or floor
transaction unless the unsecured senior debt or the claims-paying ability of the
other party thereto is rated in one of the three highest rating categories of at
least one nationally recognized statistical rating organization at the time of
entering into such transaction. The Sub-Adviser will monitor the
creditworthiness of all counterparties on an ongoing basis. If there is a
default by the other party to such a transaction, the Fund will have contractual
remedies pursuant to the agreement related to the transaction.

The swap market has grown substantially in recent years with a large number
of banks and investment banking firms acting both as principals and as agents
utilizing standardized swap documentation. As a result, the swap market has
become relatively liquid. Caps and floors are more recent innovations for which
standardized documentation has not yet

19
<PAGE>

been developed and, accordingly, they are less liquid than swaps. To the extent
the Fund sells (i.e., writes) caps and floors, it will segregate cash or high-
grade liquid assets having an aggregate net asset value at least equal to the
full amount on a daily basis of its obligations with respect to any caps or
floors.

There is no limit on the amount of interest rate swap transactions that may
be entered into by the Fund. These transactions may in some instances involve
the delivery of securities or other underlying assets to the Fund or its
counterparty to collateralize obligations under the swap. Under the
documentation currently used in those markets, the risk of loss with respect to
interest rates swaps is limited to the net amount of the payments that the Fund
is obligated contractually to make. If the other party to an interest rate swap
that is not collateralized defaults, the Fund would risk the loss of the net
amount of the payments that it contractually is entitled to receive. The Fund
may buy and sell (i.e., write) caps and floors without limitation, subject to
the segregation requirement described above.

ADDITIONAL RISKS OF OPTIONS ON FOREIGN CURRENCIES, FORWARD CONTRACTS AND FOREIGN
INSTRUMENTS

Unlike transactions entered into by the Funds in futures contracts, options
on foreign currencies and forward contracts are not traded on contract markets
regulated by the CFTC or (with the exception of certain foreign currency
options) by the SEC. To the contrary, such instruments are traded through
financial institutions acting as market-makers, although foreign currency
options also are traded on certain exchanges, such as the Philadelphia Stock
Exchange and the Chicago Board Options Exchange, subject to SEC regulation.
Similarly, options on currencies may be traded over-the-counter. In an over-the-
counter trading environment, many of the protections afforded to exchange
participants will not be available. For example, there are no daily price
fluctuation limits, and adverse market movements therefore could continue to an
unlimited extent over a period of time. Although the buyer of an option cannot
lose more than the amount of the premium plus related transaction costs, this
entire amount could be lost. Moreover, an option writer and a buyer or seller of
futures or forward contracts could lose amounts substantially in excess of any
premium received or initial margin or collateral posted due to the potential
additional margin and collateral requirements associated with such positions.

Options on foreign currencies traded on exchanges are within the
jurisdiction of the SEC, as other securities traded on such exchanges. As a
result, many of the protections provided to traders on organized exchanges will
be available with respect to such transactions. In particular, all foreign
currency option positions entered into on an exchange are cleared and guaranteed
by the Office of the Comptroller of the Currency ("OCC"), thereby reducing the
risk of counterparty default. Further, a liquid secondary market in options
traded on an exchange may be more readily available than in the over-the-counter
market, potentially permitting a Fund to liquidate open positions at a profit
prior to exercise or expiration, or to limit losses in the event of adverse
market movements.

The purchase and sale of exchange-traded foreign currency options, however,
is subject to the risks of the availability of a liquid secondary market
described above, as well as the risks regarding adverse market movements,
margining of options written, the nature of the foreign currency market,
possible intervention by governmental authorities and the effects of other
political and economic events. In addition, exchange-traded options on foreign
currencies involve certain risks not presented by the over-the-counter market.
For example, exercise and settlement of such options must be made exclusively
through the OCC which has established banking relationships in applicable
foreign countries for this purpose. As a result, the OCC, if it determines that
foreign government restrictions or taxes would prevent the orderly settlement of
foreign currency option exercises or would result in undue burdens on the OCC or
its clearing member, may impose special procedures on exercise and settlement,
such as technical changes in the mechanics of delivery, the fixing of dollar
settlement prices or prohibitions on exercise.

In addition, options on U.S. Government securities, futures contracts,
options on futures contracts, forward contracts and options on foreign
currencies may be traded on foreign exchanges and over-the-counter in foreign
countries. Such transactions are subject to the risk of governmental actions
affecting trading in or the prices of foreign currencies or securities. The
value of such positions also could be adversely affected by (i) other complex
foreign political and economic factors (ii) lesser availability than in the
United States of data on which to make trading decisions, (iii) delays in a
Fund's ability to act upon economic events occurring in foreign markets during
non-business hours in the United States, (iv) the imposition of different
exercise and settlement terms and procedures and margin requirements from those
in the United States and (v) low trading volume.

20
<PAGE>

RESTRICTED SECURITIES

Each Fund may invest up to 15% (10% for the Money Market Fund) of its net
assets in restricted securities (and securities deemed to be illiquid) unless
the Board of Trustees determines that such restricted securities are liquid.
The Board of Trustees has adopted guidelines and delegated to Allmerica
Financial Investment Management Services, Inc. (the "Manager" or "AFIMS") the
daily function of determining and monitoring liquidity of restricted securities.
The Board, however, will retain sufficient oversight and be responsible
ultimately for the determinations. Since it is not possible to predict with
assurance exactly how this market for restricted securities sold and offered
under Rule 144A will develop, the Board will monitor carefully a Fund's
investments in securities, focusing on such important factors, among others, as
valuation, liquidity and availability of information. Because market quotations
are less readily available, judgment at times may play a greater role in valuing
these securities than in the case of unrestricted securities.

INVESTMENTS IN MONEY MARKET SECURITIES

Each Fund may hold at least a portion of its assets in cash equivalents or
money market instruments. There is always the risk that the issuer of a money
market instrument may be unable to make payment upon maturity.

The Money Market Fund may hold uninvested cash reserves pending investment
during temporary, defensive periods or if, in the opinion of the Sub-Adviser,
suitable securities are not available for investment. Securities in which the
Money Market Fund may invest may not earn as high a level of current income as
long-term, lower quality securities which, however, generally have less
liquidity, greater market risk and more fluctuation in market value.

HIGH YIELD SECURITIES

Corporate debt securities purchased by the Select Emerging Markets Fund,
Select Capital Appreciation Fund, Select Growth Fund, Select Growth and Income
Fund and Select Income Fund will be rated at the time of purchase B or better by
Moody's or S&P, or equivalently rated by another NRSRO, or unrated but believed
by the Sub-Adviser to be of comparable quality under the guidelines established
for the Funds. The Select Growth Fund and the Select Growth and Income Fund may
not invest more than 15% of their assets, the Select Income Fund may not invest
more than 25% of its assets and the Select Emerging Markets Fund and Select
Capital Appreciation Fund may not invest more than 35% of their assets at the
time of investment in securities rated below Baa by Moody's or BBB by S&P, or
equivalently rated by another NRSRO, or unrated but believed by the Sub-Adviser
to be of comparable quality. Securities rated B by Moody's or S&P (or
equivalently by another NRSRO) are below investment grade and are considered, on
balance, to be predominantly speculative with respect to capacity to pay
interest and repay principal and will generally involve more credit risk than
securities in the higher rating categories.

Periods of economic uncertainty and changes can be expected to result in
increased volatility of market prices of lower-rated securities, commonly known
as "high yield" securities or "junk bonds," and of the asset value of the Select
Emerging Markets Fund, Select Capital Appreciation Fund, Select Growth Fund,
Select Growth and Income Fund and Select Income Fund. Many issuers of high yield
corporate debt securities are leveraged substantially at times, which may impair
their ability to meet debt service obligations. Also, during an economic
downturn or substantial period of rising interest rates, highly leveraged
issuers may experience financial stress.

The lack of a liquid secondary market in certain lower-rated securities may
have an adverse impact on their market price and the ability of a Fund to
dispose of particular issues when necessary to meet its liquidity needs or in
response to a specific economic event such as a deterioration in the credit-
worthiness of the issuer. In addition, a less liquid market may interfere with
the ability of a Fund to value accurately high yield securities and,
consequently, value a Fund's assets. Furthermore, adverse publicity and
investor perceptions may decrease the value and liquidity of high yield
securities. It is reasonable to expect any recession to disrupt severely the
market for high yield fixed-income securities, have an adverse impact on the
value of such securities and adversely affect the ability of the issuers of such
securities to repay principal and pay interest thereon. The market prices of
lower-rated securities are generally less sensitive to interest rate changes
than higher-rated investments, but more sensitive to adverse economic or
political changes or individual developments specific to the issuer. Periods of
economic or political uncertainty and change can be expected to result in
volatility of prices of these securities.

21
<PAGE>

The Funds also may invest in unrated debt securities of foreign and
domestic issuers. Unrated debt, while not necessarily of lower quality than
rated securities, may not have as broad a market. Sovereign debt of foreign
governments generally is rated by country. Because these ratings do not take
into account individual factors relevant to each issue and may not be updated
regularly, the Sub-Adviser may treat such securities as unrated debt. Unrated
debt securities and securities with different ratings from more than one agency
will be included in the 15%, 25% and 35% limits of the Funds as stated above,
unless such Fund's Sub-Adviser deems such securities to be the equivalent of
investment grade securities.

ASSET-BACKED SECURITIES

The Growth Fund, Select Growth and Income Fund, Select Income Fund,
Investment Grade Income Fund, Government Bond Fund and Money Market Fund may
purchase asset-backed securities, which represent a participation in, or are
secured by and payable from, a stream of payments generated by particular
assets, frequently a pool of assets similar to one another. Assets generating
such payments include instruments such as motor vehicle installment purchase
obligations, credit card receivables and home equity loans. Payment of principal
and interest may be guaranteed for certain amounts and time periods by a letter
of credit issued by a financial institution unaffiliated with the issuer of the
securities. The estimated life of an asset-backed security varies with the
prepayment experience of the underlying debt instruments. The rate of such
prepayments, and hence the life of the asset-backed security, will be primarily
a function of current market rates, although other economic and demographic
factors will be involved. Under certain interest rate and prepayment rate
scenarios, the Funds may fail to recoup fully their investment in asset-backed
securities. A Fund will not invest more than 20% of its total assets in asset-
backed securities.

MORTGAGE-BACKED SECURITIES

The Select Income Fund, Investment Grade Income Fund and Government Bond
Fund may invest in mortgage-backed securities which are debt obligations secured
by real estate loans and pools of loans on single family homes, multi-family
homes, mobile homes and, in some cases, commercial properties. The Funds may
acquire securities representing an interest in a pool of mortgage loans that are
issued or guaranteed by a U.S. government agency such as Ginnie Mae, Fannie Mae
and Freddie Mac.

Mortgage-backed securities are in most cases "pass-through" instruments
through which the holder receives a share of all interest and principal payments
from the mortgages underlying the certificate. Because the prepayment
characteristics of the underlying mortgages vary, it is not possible to predict
accurately the average life or realized yields of a particular issue of pass-
through certificates. During periods of declining interest rates, prepayment of
mortgages underlying mortgage-backed securities can be expected to accelerate.
When the mortgage obligations are prepaid, the Funds reinvest the prepaid
amounts in securities, the yield of which reflects interest rates prevailing at
the time. Moreover, prepayment of mortgages that underlie securities purchased
at a premium could result in losses.

The Funds also may invest in multiple class securities issued by U.S.
government agencies and instrumentalities such as Fannie Mae, Freddie Mac and
Ginnie Mae, including guaranteed collateralized mortgage obligations ("CMOs")
and Real Estate Mortgage Investment Conduit ("REMIC") pass-through or
participation certificates, when consistent with the Funds' investment
objective, policies and limitations. A CMO is a type of bond secured by an
underlying pool of mortgages or mortgage pass-through certificates that are
structured to direct payment on underlying collateral to different series or
classes of obligations. A REMIC is a CMO that qualifies for special tax
treatment under the Internal Revenue Code and invests in certain mortgages
principally secured by interests in real property and other permitted
investments.

CMOs and guaranteed REMIC pass-through certificates ("REMIC Certificates")
issued by Fannie Mae, Freddie Mac and Ginnie Mae are types of multiple pass-
through securities. Investors may purchase beneficial interests in REMICs, which
are known as "regular" interests or "residual" interests. The Funds currently do
not intend to purchase residual interests in REMICs. The REMIC Certificates
represent beneficial ownership interests in a REMIC trust, generally consisting
of mortgage loans or Fannie Mae, Freddie Mac or Ginnie Mae guaranteed mortgage
pass-through certificates. The obligations of Fannie Mae or Freddie Mac under
their respective guaranty of the REMIC Certificates are obligations solely of
Fannie Mae or Freddie Mac, respectively.

22
<PAGE>

Fannie Mae REMIC Certificates are issued and guaranteed as to timely
distribution of principal and interest by Fannie Mae. In addition, Fannie Mae
will be obligated to distribute the principal balance of each class of REMIC
Certificates in full, whether or not sufficient funds are available otherwise.

For Freddie Mac REMIC Certificates, Freddie Mac guarantees the timely
payment of interest and also guarantees the payment of principal as payments are
required to be made on the underlying mortgage participation certificates
("PCs"). PCs represent undivided interests in specified residential mortgages or
participations therein purchased by Freddie Mac and placed in a PC pool. With
respect to principal payments on PCs, Freddie Mac generally guarantees ultimate
collection of all principal of the related mortgage loans without offset or
deduction. Freddie Mac also guarantees timely payment of principal on certain
PCs referred to as "Gold PCs."

Ginnie Mae REMIC Certificates guarantee the full and timely payment of
interest and principal on each class of securities (in accordance with the terms
of those classes). This Ginnie Mae guarantee is backed by the full faith and
credit of the United States.

REMIC Certificates issued by Fannie Mae, Freddie Mac and Ginnie Mae are
treated as U.S. government securities for purposes of investment policies. There
can be no assurance that the U.S. Government will continue to provide financial
support to Fannie Mae, Freddie Mac or Ginnie Mae in the future.

STRIPPED MORTGAGE-BACKED SECURITIES

The Select Income Fund, Investment Grade Income Fund and Government Bond
Fund may invest in stripped mortgage-backed securities ("SMBS"). SMBS are
derivative multiclass mortgage securities. SMBS may be issued by agencies or
instrumentalities of the U.S. Government or by private originators of, or
investors in, mortgage loans, including savings and loan associations, mortgage
banks, commercial banks, investment banks and special purpose entities of the
foregoing.

SMBS usually are structured with two classes that receive different
proportions of the interest and principal distributions on a pool of mortgage
assets. One type of SMBS will have one class receiving some of the interest and
most of the principal from the mortgage assets, while the other class will
receive most of the interest and the remainder of the principal. In some cases,
one class will receive all of the interest (the interest-only or "IO" class)
while the other class will receive all of the principal (the principal-only or
"PO" class). The yield to maturity on an IO class is extremely sensitive to the
rate of principal payments (including prepayment on the related underlying
mortgage assets), and a rapid rate of principal payments may have a material,
adverse effect on a portfolio yield to maturity from these securities. If the
underlying mortgage assets experience greater than anticipated prepayments of
principal, the Funds may fail to recoup fully their initial investment in these
securities even if the security is in one of the highest rating categories.
Certain SMBS may be deemed "illiquid" and subject to the Funds' limitations on
investment in illiquid securities. The market value of the PO class generally is
unusually volatile in response to changes in interest rates. The yields on a
class of SMBS that receives all or most of the interest from mortgage assets
generally are higher than prevailing market yields in other mortgage-backed
securities because their cash flow patterns are more volatile and there is a
greater risk that the initial investment will not be recouped fully. The Sub-
Adviser will seek to manage these risks (and potential benefits) by investing in
a variety of such securities and by using certain hedging techniques.

HEDGING TECHNIQUES AND INVESTMENT PRACTICES

The Select Emerging Markets Fund, Select Capital Appreciation Fund and Select
International Equity Fund may employ certain strategies in order to manage
exchange rate risks. For example, the Funds may hedge some or all of their
investments denominated in a foreign currency against a decline in the value of
that currency. The Funds may enter into contracts to sell that foreign currency
for U.S. dollars (not exceeding the value of a Fund's assets denominated in or
exposed to that currency) or by participating in options on futures contracts
with respect to such currency ("position hedge"). The Funds also could hedge
that position by selling a second currency that is expected to perform similarly
to the currency in which portfolio investments are denominated for U.S. dollars
("proxy hedge"). The Funds also may enter into a forward contract to sell the
currency in which the security is denominated for a second currency that is
expected to perform better relative to the U.S. dollar if their Sub-Adviser
believes there is a reasonable degree of correlation between movements in the
two currencies ("cross-hedge"). As an operational policy, the Funds will not
commit more than 10% of

23
<PAGE>

their assets to the consummation of cross-hedge contracts and either will cover
currency hedging transactions with liquid portfolio securities denominated in or
whose value is tied to the applicable currency or segregate liquid assets in the
amount of such commitments. In addition, when the Funds anticipate repurchasing
securities denominated in a particular currency, the Funds may enter into a
forward contract to purchase such currency in exchange for the dollar or another
currency ("anticipatory hedge").

These strategies minimize the effect of currency appreciation as well as
depreciation, but do not protect against a decline in the underlying value of
the hedged security. In addition, such strategies may reduce or eliminate the
opportunity to profit from increases in the value of the original currency and
may have an adverse impact on a Fund's performance if its Sub-Adviser's
projection of future exchange rates is inaccurate.

STAND-BY COMMITMENTS

The Select Income Fund, Investment Grade Income Fund, Government Bond Fund
and Money Market Fund may enter into Stand-by Commitments. Under a stand-by
commitment, a dealer agrees to purchase from the Fund, at the Fund's option,
specified securities at a specified price. Stand-by commitments are exercisable
by the Fund at any time before the maturity of the underlying security, and may
be sold, transferred or assigned by the Fund only with respect to the underlying
instruments.

Although stand-by commitments are often available without the payment of
any direct or indirect consideration, if necessary or advisable, the Fund may
pay for a stand-by commitment either separately in cash or by paying a higher
price for securities which are acquired subject to the commitment.

Where the Fund pays any consideration directly or indirectly for a stand-by
commitment, its cost will be reflected as unrealized depreciation for the period
during which the commitment is held by the Fund.

The Fund will enter into stand-by commitments only with banks and broker-
dealers which present minimal credit risks. In evaluating the creditworthiness
of the issuer of a stand-by commitment, the Sub-Adviser will review periodically
the issuer's assets, liabilities, contingent claims and other relevant financial
information.

The Fund will acquire stand-by commitments solely to facilitate liquidity
and does not intend to exercise its rights thereunder for trading purposes.
Stand-by commitments will be valued at zero in determining the Fund's net asset
value.

PORTFOLIO TURNOVER

The portfolio turnover rate for a Fund is calculated by dividing the lesser
of purchases or sales of portfolio securities by the Fund for a given year by
the monthly average of the value of the Fund's portfolios securities for that
year. The purchase or sale of all securities whose maturities or expiration
dates at the time of acquisition are less than 12 months and of money market
funds of amounts too small to invest in short-term obligations are not included
in the portfolio turnover rate.

A higher portfolio turnover rate may involve corresponding greater
brokerage commissions and other transaction costs, which would be borne directly
by the Fund, as well as additional realized gains and/or losses to shareholders.
Following are explanations of any significant variations in the Funds' portfolio
turnover rates over the two most recently completed fiscal years or any
anticipated variation in the portfolio turnover rate.

<TABLE>
<CAPTION>
FUND DECEMBER 31, 1997 DECEMBER 31, 1998
- ---- ----------------- -----------------
<S> <C> <C>
Select Emerging Markets Fund N/A 62%
Select Aggressive Growth Fund 95% 99%
Select Capital Appreciation Fund 133% 147%
Select Value Opportunity Fund 110% 81%
Select International Equity Fund 20% 27%
Select Growth Fund 75% 86%
Select Strategic Growth Fund N/A 24%
</TABLE>

24
<PAGE>

<TABLE>
<CAPTION>
FUND DECEMBER 31, 1997 DECEMBER 31, 1998
- ---- ----------------- -----------------
<S> <C> <C>
Growth Fund 79% 108%
Equity Index Fund 9% 17%
Select Growth and Income Fund 71% 112%
Select Income Fund 79% 130%
Investment Grade Income Fund* 48% 158%
Government Bond Fund 56% 61%
Money Market Fund N/A N/A
</TABLE>

* The portfolio turnover rate was greater in fiscal year 1998 due to the larger
number of mortgage rolls held by the Fund during that period.

MANAGEMENT OF THE TRUST

The Trust is managed by a Board of Trustees. The Trustees have overall
responsibility for implementation of the investment policies and operations of
the Funds of the Trust. The Board of Trustees of the Trust holds regular
quarterly meetings and at other times on an as needed basis. The affairs of the
Trust are conducted in accordance with the Bylaws adopted by the Trustees and
the applicable laws of the Commonwealth of Massachusetts, the state in which the
Trust is organized.

<TABLE>
<CAPTION>
POSITIONS HELD PRESENT POSITION AND PRINCIPAL
NAME, ADDRESS AND AGE WITH THE TRUST/(1)/ OCCUPATIONS DURING THE PAST 5 YEARS
- --------------------- ------------------ -----------------------------------
<S> <C> <C>
P. Kevin Condron (53) Trustee President and Chief Executive Officer,
The Granite Group The Granite Group (plumbing supplies), 1998
12 E. Worcester Street - present; President, Central Supply Co., 1983 -
Worcester, Massachusetts 1997; Director, Peoples Heritage Financial Group;
Director, Family Bank

**Cynthia A. Hargadon (44) Trustee Director of Investments, National Automobile
1880 Virginia Avenue Dealers Association (retirement trust), 1998 -
McLean, Virginia present, and Senior Consultant, Johnson Custom
Strategies (investment services firm), 1996 - present;
Senior Vice President and Chief Investment Officer,
ICMA Retirement Corporation (investment adviser),
1987 - 1996

Gordon Holmes (61) Trustee Lecturer at Bentley College, 1998 - present;
75 Clarendon Street Lecturer and Executive in Residence, Boston
Boston, Massachusetts University, 1997 - 1998; Certified Public
Accountant; Retired Partner, Tofias, Fleishman
Shapiro & Co., P.C. (Accountants) 1976-1996

*John P. Kavanaugh (44) Trustee and President Allmerica Asset Management,
440 Lincoln Street Vice President, Inc. since 1995; Vice President, Director, Chief
Worcester, Massachusetts Investment Officer, First Allmerica and
Allmerica Financial Life Insurance and Annuity
Company ("Allmerica Financial Life")

**Bruce E. Langton (67) Trustee Trustee, Bankers Trust (institutional mutual funds);
99 Jordan Lane Member, Investment Committee, TWA Pilots Trust
Stamford, Connecticut Annuity Plan; Member, Investment Committee,
Unilever United States -Pension & Thrift plans
</TABLE>

25
<PAGE>

<TABLE>
<CAPTION>
POSITIONS HELD PRESENT POSITION AND PRINCIPAL
NAME, ADDRESS AND AGE WITH THE TRUST/(1)/ OCCUPATIONS DURING THE PAST 5 YEARS
- --------------------- ------------------ -----------------------------------
<S> <C> <C>
*John F. O'Brien (56) Trustee and President, Chief Executive Officer and Director, First
440 Lincoln Street Chairman of the Board, Allmerica; Director and Chairman of the Board,
Allmerica Financial Life; Director, Allemerica
Investments, Inc.; Director, ABIOMED, Inc.
(medical devices); Director, Cabot Corporation
(special chemicals), Director, TJX Corporation,
Inc. (retail)

Attiat F. Ott (63) Trustee Professor of Economics and Director of the
262 Salisbury Street Institute for Economic Studies, Clark University
Worcester, Massachusetts

**Richard M. Reilly (60) Trustee President, Allmerica Financial Life since
440 Lincoln Street and Vice President 1995; Vice President, First Allmerica; President,
Worcester, Massachusetts AFIMS; Director, Allmerica Investments, Inc.

**Ranne P. Warner (54) Trustee President, Centros Properties, USA (real estate);
Centros Properties USA, Inc. Owner, Ranne P. Warner and Company;
176 Federal Street, 6/th/ Floor Director, Wainwright Bank & Trust Co.
Boston, Massachusetts 02110 (commercial bank); Trustee, Ericksen Trust
(real estate)

David J. Mueller (46) Vice President and Treasurer Vice President, First Allmerica since 1996;
440 Lincoln Street Assistant Vice President, First Allmerica, 1995 -
Worcester, Massachusetts 1996; Business Analyst, First Allmerica, 1993 -
1995; Manager, Coopers & Lybrand, 1987 - 1993.

George Boyd (54) Secretary Counsel, First Allmerica since January 1997;
440 Lincoln Street Director, Mutual Fund Administration - Legal
Worcester, Massachusetts and Regulatory, Investors Bank & Trust Company,
1995 - 1996; Vice President and Counsel, 440
Financial Group and First Data Investor Services
Group, 1992 - 1995.
</TABLE>

(1) The individuals listed hold the same position with Allmerica Securities
Trust, a closed-end management investment company which is a part of the
Trust complex that includes the Trust.

* Indicates the Trustees who are "interested persons" of the Trust as defined
in the 1940 Act.

** Indicates members of the Trust's Investment Operations Committee, which
reviews the performance of each Fund and recommends to the Board of
Trustees the selection and retention of Sub-Advisers.

The Trustees who are not directors, officers, or employees of the Trust or
any investment adviser are reimbursed for their travel expenses in attending
meetings of the Trust.

Listed below is the compensation paid to each Trustee by the Trust and by
all fourteen funds in the complex for the fiscal year ended December 31, 1998.
The Fund currently does not provide any pension or retirement benefits for its
Trustees or officers.

26
<PAGE>

COMPENSATION TABLE

<TABLE>
<CAPTION>
AGGREGATE TOTAL COMPENSATION
COMPENSATION FROM TRUST COMPLEX
*NAME OF PERSON AND POSITION FROM TRUST PAID TO TRUSTEES*
---------------------------------------------------------------------
<S> <C> <C>
P. Kevin Condron** $12,155.69 $12,423.00
Cynthia Hargadon $20,516.09 $21,000.00
Gordon Holmes $21,500.74 $22,000.00
Bruce E. Langton $23,447.39 $24,000.00
Attiat F. Ott $21,503.68 $22,000.00
Ranne P. Warner $24,424.25 $25,000.00
John P. Kavanaugh 0 0
John F. O'Brien 0 0
Richard M. Reilly 0 0
</TABLE>

* Includes one other investment company.

** Mr. Condron was appointed Trustee on May 12, 1998.

CONTROL PERSON AND PRINCIPAL HOLDERS OF SECURITIES

The Trust was established as a Massachusetts business trust under the laws
of Massachusetts by an Agreement and Declaration of Trust dated October 11, 1984
(the "Trust Declaration"). AFIMS is the Manager of the Trust. The shares of each
of the Funds of the Trust may be purchased only by Separate Accounts established
by First Allmerica or Allmerica Financial Life for the purpose of funding
variable annuity contracts and variable life insurance policies. The Trust has
obtained an exemptive order from the Securities and Exchange Commission to
permit Fund shares to be sold to variable annuity and variable life insurance
separate accounts of both affiliated and unaffiliated life insurance companies
and certain qualified pension and retirement plans. The Separate Accounts of
First Allmerica or its affiliates are the shareholders of the Trust. As of
February 15, 1999, Allmerica Financial Life, owned both of record and
beneficially in excess of 99% of the shares of the Select Emerging Markets Fund
and in excess of 99% of the shares of the Select Strategic Growth Fund. A
shareholder that owns more than 25% of the shares of a Fund is deemed to be a
controlling person of such Fund. As of February 15, 1999, the Trustees and
officers of the Trust, as a group, owned less than 1% of the outstanding shares
of any Fund. AFIMS, First Allmerica and Allmerica Financial Life are indirect
wholly-owned subsidiaries of Allmerica Financial Corporation ("AFC"), a
publicly-traded Delaware holding company for a group of affiliated companies,
the largest of which is First Allmerica. The address of AFIMS, First Allmerica,
Allmerica Financial Life and AFC is 440 Lincoln Street, Worcester, MA 01653.
AFIMS and First Allmerica were organized in Massachusetts and Allmerica
Financial Life was organized in Delaware. AFIMS also serves as investment
manager of The Fulcrum Trust, another open-end investment management company.

INVESTMENT MANAGEMENT AND OTHER SERVICES

The overall responsibility for the supervision of the affairs of the Trust
vests in the Board of Trustees of the Trust which meets on a quarterly basis.
AFIMS serves as investment manager of the Trust pursuant to a management
agreement between the Trust and the Manager (the "Management Agreement"). The
Manager is responsible for the management of the Trust's day-to-day business
affairs and has general responsibility for the management of the investments of
the Funds. The Manager has entered into sub-adviser agreements with different
investment advisory firms (the "Sub-Advisers") to manage each of the Funds, at
its expense, subject to the requirements of the 1940 Act, as amended. Each Sub-
Adviser, which has been selected on the basis of various factors including
management experience, investment techniques, and staffing, is authorized to
engage in portfolio transactions on behalf of the applicable Fund subject to
such general or specific instructions as may be given by the Trustees and/or the
Manager.

27
<PAGE>

The Sub-Advisers have been selected by the Manager and Trustees in
consultation with BARRA RogersCasey, Inc. ("BARRA RogersCasey"), a pension
consulting firm. BARRA RogersCasey is wholly controlled by BARRA, Inc. The cost
of such consultation is borne by the Manager.

BARRA RogersCasey provides consulting services to pension plans representing
hundreds of billions of dollars in total assets and, in its consulting capacity,
monitors the investment performance of over 1,000 investment advisers. As a
consultant, BARRA RogersCasey has no decision-making authority with respect to
the Funds, and is not responsible for advice provided by the Manager or the Sub-
Advisers. From time to time, specific clients of BARRA RogersCasey and the Sub-
Advisers will be named in sales materials.

The following is information relating to control and affiliations of the
Manager and certain Sub-Advisers of the Trust.

AFIMS, First Allmerica and Allmerica Financial Life are indirect wholly-owned
subsidiaries of Allmerica Financial Corporation ("AFC"), a publicly-traded
Delaware holding company for a group of affiliated companies, the largest of
which is First Allmerica. First Allmerica and Allmerica Financial Life have
established Separate Accounts for the purpose of funding variable annuity
contracts and variable life insurance policies. The shares of each of the
Funds of the Trust may be purchased only through these Separate Accounts.

Schroder Capital Management International Inc. ("SCMI"), Sub-Adviser to the
Select Emerging Markets Fund, is a wholly-owned U.S. subsidiary of Schroders
U.S. Holdings, Inc., the indirect wholly-owned U.S. subsidiary of Schroders plc,
a publicly owned holding company organized under the laws of England. Schroders
plc and its affiliates engage in international merchant banking and investment
management business, and as of December 31, 1998, had assets under management of
approximately $27.1 billion.

Nicholas-Applegate Capital Management, L.P. ("NACM") was founded in 1984 and
serves as Sub-Adviser to the Select Aggressive Growth Fund.

T. Rowe Price Associates, Inc. ("T. Rowe Price") serves as Sub-Adviser to the
Select Capital Appreciation Fund. T. Rowe Price International Series, Inc., an
investment company managed by a T. Rowe Price affiliate, is currently used as an
investment vehicle for certain insurance products sponsored by First Allmerica
and Allmerica Financial Life.

Cramer Rosenthal McGlynn, LLC ("CRM"), Sub-Adviser to the Select Value
Opportunity Fund, is owned by its active investment professionals, Cramer
Rosenthal McGlynn, Inc., ("Cramer Rosenthal") and WT Investments, Inc. ("WTI")
an indirect, wholly-owned subsidiary of Wilmington Trust Corporation ("WTC").
Founded in 1973, Cramer Rosenthal provides investment advice to individuals,
state and local government agencies, pension and profit sharing plans, trusts,
estates, endowments and other organizations. WTC is a bank and holding company
and has operations in Delaware, Pennsylvania, Florida, Maryland and New York.
Through its subsidiaries, WTC engages in residential, commercial and
construction lending, deposit taking, insurance, travel, investment advisory and
broker-dealer services and mutual fund administration. As of December 31, 1998,
WTC, together with its subsidiaries, had $6 billion in assets. Wilmington Trust
Company, the largest subsidiary of WTC, is among the nation's largest personal
trust companies and holds approximately $116 billion in fiduciary capacity. On
January 2, 1998, WTI acquired an 18.72% fully diluted interest in CRM.

Bank of Ireland Asset Management (U.S.) Limited ("BIAM"), Sub-Adviser to the
Select International Equity Fund, is a wholly-owned subsidiary of Bank of
Ireland. Bank of Ireland provides investment management services through a
network of affiliated companies, including BIAM which represents North American
clients.

Putnam Investment Management, Inc., ("Putnam") Sub-Adviser to the Select
Growth Fund, is a wholly-owned subsidiary of Putnam Investments, Inc., a holding
company which, other than a minority interest owned by employees, is in turn
wholly-owned by Marsh & McLennan Companies, Inc., a publicly-owned holding
company whose principal businesses are international insurance and reinsurance
brokerage, employee benefit consulting and investment management.

28
<PAGE>

Cambiar Investors, Inc. ("Cambiar"), Sub-Adviser to the Select Strategic
Growth Fund, is a registered investment adviser that began operations in 1973
and became a wholly-owned subsidiary of United Asset Management Corporation in
1990 which provides diverse investment management services to institutions and
high net worth individuals and retail investors.

Miller Anderson & Sherrerd, LLP ("MAS"), Sub-Adviser to the Growth Fund, is
wholly-owned by indirect subsidiaries of Morgan Stanley Dean Witter & Co.
("MSDW"), and is a division of Morgan Stanley Dean Witter Investment Management.
MAS is the adviser of the MAS Funds, a registered investment company offering
investment alternatives to institutional clients with a minimum initial
investment of $1 million. MAS also manages certain assets for First Allmerica
and its affiliates. MSDW is a preeminent global financial services firm that
maintains leading market positions in each of its three primary businesses -
securities, asset management and credit services.

AAM serves as Sub-Adviser to the Equity Index Fund as well as the Investment
Grade Income Fund, Government Bond Fund and Money Market Fund, other series of
the Trust. AAM is an indirect, wholly-owned subsidiary of AFC. AAM serves as
investment adviser to First Allmerica's General Account and to a number of
affiliated insurance companies and other affiliated accounts, and as Adviser to
Allmerica Securities Trust, a diversified, closed-end management investment
company. AFC is a publicly-traded Delaware holding company for a group of
affiliated companies.

J.P. Morgan Investment Management Inc. ("J.P. Morgan") Sub-Adviser to the
Select Growth and Income Fund, is a wholly-owned asset management subsidiary of
J.P. Morgan & Co. Incorporated, which was founded in 1861, and serves as an
investment adviser for employee benefit plans and other institutional assets, as
well as mutual funds and variable annuities. J.P. Morgan & Co. Incorporated is
a bank holding company and a global financial services firm, providing
specialized advice and services for governments, business and individuals.

Standish, Ayer & Wood, Inc. ("SAW"), Sub-Adviser to the Select Income Fund,
also serves as investment adviser to an institutional account sponsored by an
AFC affiliate. Through its affiliate, Standish International Investment
Management Company, L.P. SAW offers international investment services. SAW is
an independent investment counseling firm owned by its twenty-four directors who
are active with the firm.

The following is a list of persons who are affiliated persons of the Trust and
affiliated persons of the Manager and/or any Sub-Adviser and the capacities in
which the person is affiliated.

<TABLE>
<CAPTION>
POSITION(S) HELD POSITION(S) HELD WITH THE MANAGER
NAME WITH THE TRUST OR SUB-ADVISER OF THE TRUST
---- -------------- ---------------------------
<S> <C> <C>
Stephen W. Bright Vice President Vice President, AAM; Vice President,
AFIMS

Lisa M. Coleman Vice President Vice President, AAM

David J. Mueller Vice President and Treasurer Vice President, AFIMS
(Principal Accounting Officer)

John C. Donohue Vice President Vice President, AAM

John P. Kavanaugh Vice President President, AAM; Vice President,
AFIMS

Richard J. Litchfield Vice President Vice President, AAM

John F. O'Brien Chairman of the Board Chairman and Director, AFIMS;
Director, AAM

Richard M. Reilly President Director and President, AFIMS
</TABLE>

29
<PAGE>

First Allmerica, Allmerica Financial Life, AFIMS and AAM are direct or
indirect, wholly-owned subsidiaries of AFC. The Trust serves as an investment
vehicle for the Separate Accounts established by First Allmerica and Allmerica
Financial Life.

Under its Management Agreement with the Trust, the Manager is obligated to
perform certain administrative and management services for the Trust; furnishes
to the Trust all necessary office space, facilities, and equipment; and pays the
compensation, if any, of officers and Trustees who are affiliated with the
Manager. Other than the expenses specifically assumed by the Manager under the
Management Agreement, all expenses incurred in the operation of the Trust are
borne by the Trust, including fees and expenses associated with the registration
and qualification of the Trust's shares under the Securities Act of 1933 (the
"1933 Act"); other fees payable to the SEC; independent accountant, legal and
custodian fees; association membership dues; taxes; interest; insurance
premiums; brokerage commissions; fees and expenses of the Trustees who are not
affiliated with the Manager; expenses for proxies, prospectuses and reports to
shareholders; Fund recordkeeping expenses and other expenses.

For the services provided to the Funds, the Manager receives fees computed
daily at an annual rate based on the average daily net asset value of each Fund
as set forth below.

<TABLE>
<CAPTION>
SELECT SELECT SELECT CAPITAL SELECT VALUE SELECT SELECT
EMERGING AGGRESSIVE APPRECIATION OPPORTUNITY INTERNATIONAL GROWTH
MARKETS FUND GROWTH FUND FUND FUND EQUITY FUND FUND
------------ ----------- -------------- ------------ ------------- ----
<S> <C> <C> <C> <C> <C> <C>
Manager Fee 1.35%* (1) (1) (2) (1) (2)
</TABLE>

<TABLE>
<CAPTION>
SELECT
STRATEGIC EQUITY SELECT GROWTH SELECT INVESTMENT
GROWTH GROWTH INDEX AND INCOME INCOME GRADE
FUND FUND FUND FUND FUND INCOME FUND
---- ---- ---- ---- ---- -----------
<S> <C> <C> <C> <C> <C> <C>
Manager Fee 0.85% (1) (3) (1) (4) (4)
</TABLE>

<TABLE>
<CAPTION>
GOVERNMENT MONEY
BOND MARKET
FUND FUND
---- ----
<S> <C> <C>
Manager Fee 0.50% (3)
</TABLE>

______________________

*The Manager voluntarily has agreed until further notice to waive its management
fee in the event that expenses of the Select Emerging Markets Fund exceed 2.00%
of the Fund's average daily net assets. The amount of such waiver will be
limited to the net amount of management fees earned by the Manager from the Fund
after subtracting the fees paid by the Manager to SCMI for sub-advisory
services.

(1) The Manager's fees for the Select Aggressive Growth Fund, Select Capital
Appreciation Fund, Select International Equity Fund, Growth Fund and Select
Growth and Income Fund, computed daily at an annual rate based on the
average daily net assets of each Fund, are based on the following schedule:

<TABLE>
<CAPTION>
SELECT SELECT GROWTH
SELECT AGGRESSIVE SELECT CAPITAL INTERNATIONAL AND INCOME
ASSETS GROWTH FUND APPRECIATION FUND EQUITY FUND GROWTH FUND FUND
------ ----------- ----------------- ----------- ----------- ----
<S> <C> <C> <C> <C> <C>
First $100 Million.. 1.00% 1.00% 1.00% 0.60% 0.75%
Next $150 Million... 0.90% 0.90% 0.90% 0.60% 0.70%
Next $250 Million... 0.85% 0.85% 0.85% 0.40% 0.65%
Over $500 Million... 0.85% 0.85% 0.85% 0.35% 0.65%
</TABLE>

30
<PAGE>

(2) The Manager's fees for the Select Value Opportunity Fund and Select Growth
Fund, computed daily at an annual rate based on the average daily net assets
of each Fund, are based on the following schedule:

<TABLE>
<CAPTION>
SELECT VALUE
OPPORTUNITY SELECT GROWTH
ASSETS FUND FUND
------ ---- ----
<S> <C> <C>
First $100 Million............... 1.00% 0.85%
Next $150 Million................ 0.85% 0.85%
Next $250 Million................ 0.80% 0.80%
Next $250 Million................ 0.75% 0.75%
Over $750 Million................ 0.70% 0.70%
</TABLE>

The Manager voluntarily has agreed to limit its management fees to an annual
rate of 0.90% of average daily net assets of the Select Value Opportunity
Fund until further notice.

(3) The Manager's fees for the Equity Index Fund and Money Market Fund, computed
daily at an annual rate based on the average daily net assets of each Fund,
are based on the following schedule:

<TABLE>
<CAPTION>
EQUITY MONEY
INDEX MARKET
ASSETS FUND FUND
------ ---- ----
<S> <C> <C>
First $50 Million............................. 0.35% 0.35%
Next $200 Million............................. 0.30% 0.25%
Over $250 Million............................. 0.25% 0.20%
</TABLE>

(4) The Manager's fees for the Select Income Fund and Investment Grade Income
Fund, computed daily at an annual rate based on the average daily net assets
of each Fund, are based on the following schedule:

<TABLE>
<CAPTION>
SELECT INVESTMENT
INCOME GRADE
ASSETS FUND INCOME FUND
------- ---- -----------
<S> <C> <C>
First $50 Million......................... 0.60% 0.50%
Next $50 Million.......................... 0.55% 0.45%
Over $100 Million......................... 0.45% 0.40%
</TABLE>

The Manager is responsible for the payment of all fees to the Sub-Advisers.
The Manager pays each Sub-Adviser fees computed daily at an annual rate based on
the average daily net asset value of each Fund as set forth below. In certain
Funds, Sub-Adviser fees vary according to the level of assets in such Funds,
which will reduce the fees paid by the Manager as Fund assets grow but will not
reduce the operating expenses of such Funds.

<TABLE>
<CAPTION>
SELECT SELECT SELECT CAPITAL SELECT VALUE SELECT SELECT
EMERGING AGGRESSIVE APPRECIATION OPPORTUNITY INTERNATIONAL GROWTH
MARKETS FUND GROWTH FUND FUND FUND EQUITY FUND FUND
------------- ----------- ---- ---- ----------- ----
<S> <C> <C> <C> <C> <C> <C>
Sub-Adviser Fee (5) (6) 0.50% (7) (8) (9)
</TABLE>

<TABLE>
<CAPTION>
SELECT
STRATEGIC EQUITY SELECT GROWTH SELECT INVESTMENT
GROWTH GROWTH INDEX AND INCOME INCOME GRADE INCOME
FUND FUND FUND FUND FUND FUND
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Sub-Adviser Fee (9) (10) 0.10% (11) 0.20% 0.20%
</TABLE>

31
<PAGE>

<TABLE>
<CAPTION>
GOVERNMENT MONEY
BOND MARKET
FUND FUND
---- ----
<S> <C> <C>
Sub-Adviser Fee 0.20% 0.10%
</TABLE>

(5) For its services, SCMI will receive a fee computed daily at an annual rate
based on the average daily net assets of the Select Emerging Markets Fund,
under the following schedule:

<TABLE>
<CAPTION>
ASSETS RATE
------ ----
<S> <C>
First $50 Million.................. 1.00%
Next $50 Million................... 0.85%
Next $150 Million.................. 0.75%
Over $250 Million.................. 0.60%
</TABLE>

(6) For its services, NACM will receive a fee computed daily at an annual rate
based on the average daily net assets of the Select Aggressive Growth Fund,
under the following schedule:

<TABLE>
<CAPTION>
ASSETS RATE
------ ----
<S> <C>
First $100 Million..................... 0.60%
Next $150 Million...................... 0.55%
Next $250 Million...................... 0.50%
Over $500 Million...................... 0.45%
</TABLE>

(7) For its services, CRM will receive a fee computed daily at an annual rate
based on the average daily net assets of the Select Value Opportunity Fund,
under the following schedule:

<TABLE>
<CAPTION>
ASSETS RATE
------ ----
<S> <C>
First $100 Million.................... 0.60%
Next $150 Million..................... 0.50%
Next $250 Million..................... 0.40%
Next $250 Million..................... 0.375%
Over $750 Million..................... 0.35%
</TABLE>

(8) For its services, BIAM will receive a fee computed daily at an annual rate
based on the average daily net assets of the Select International Equity
Fund, under the following schedule:

<TABLE>
<CAPTION>
ASSETS RATE
------ ----
<S> <C>
First $50 Million....................... 0.45%
Next $50 Million........................ 0.40%
Over $100 Million....................... 0.30%
</TABLE>

(9) For their services, Putnam and Cambiar will receive a fee computed daily at
an annual rate based on the average daily net assets of the Select Growth
Fund and Select Strategic Growth Fund, respectively, under the following
schedule:

<TABLE>
<CAPTION>
ASSETS RATE
------ ----
<S> <C>
First $50 Million........................ 0.50%
Next $100 Million........................ 0.45%
Next $100 Million........................ 0.35%
Next $100 Million........................ 0.30%
Over $350 Million........................ 0.25%
</TABLE>

32
<PAGE>

(10) For its services, MAS will receive a fee based on the aggregate assets of
the Growth Fund and certain other accounts of the Manager and its
affiliates which are managed by MAS, under the following schedule:

<TABLE>
<CAPTION>
ASSETS RATE
------ ----
<S> <C>
First $50 Million........................... 0.50%
Next $50 Million............................ 0.375%
Next $400 Million........................... 0.25%
Next $350 Million........................... 0.20%
Over $850 Million........................... 0.15%
</TABLE>

(11) For its services, J.P. Morgan will receive a fee computed daily at an
annual rate based on the average daily net assets of the Select Growth and
Income Fund, under the following schedule:

<TABLE>
<CAPTION>
ASSETS RATE
------ ----
<S> <C>
First $500 Million......................... 0.30%
Next $500 Million.......................... 0.25%
Over $1 Billion............................ 0.20%
</TABLE>

The total gross fees (before reimbursement) paid to the Manager under the
Management Agreement for each of the last three fiscal years ended December 31,
1998 were as follows:

<TABLE>
<CAPTION>
FISCAL YEAR 1998 FISCAL YEAR 1997 FISCAL YEAR 1996
---------------- ---------------- ----------------
<S> <C> <C> <C>
Select Emerging Markets Fund* $ 225,711 N/A N/A
Select Aggressive Growth Fund $5,977,909 $4,850,649 $3,302,349
Select Capital Appreciation Fund $2,417,031 $1,813,444 $ 902,600
Select Value Opportunity Fund $2,138,839 $1,433,016 $ 726,992
Select International Equity Fund $4,117,316 $3,258,876 $1,701,942
Select Growth Fund $5,112,118 $2,959,723 $1,508,861
Select Strategic Growth Fund* $ 68,645 N/A N/A
Growth Fund $3,519,665 $2,840,683 $2,163,374
Equity Index Fund $1,087,069 $ 705,708 $ 375,619
Select Growth and Income Fund $3,790,917 $2,807,177 $1,778,832
Select Income Fund $ 721,336 $ 524,021 $ 398,522
Investment Grade Income Fund $ 933,311 $ 710,821 $ 596,308
Government Bond Fund $ 338,796 $ 244,355 $ 235,359
Money Market Fund $ 731,259 $ 647,964 $ 510,258
</TABLE>

* The Select Emerging Markets Fund and Select Strategic Growth Fund began
operations on February 20, 1998.

The total gross fees paid to each Sub-Adviser under the respective Sub-
Adviser Agreement for each of the last three fiscal years ended December 31,
1998 were as follows:

<TABLE>
<CAPTION>
PAYMENTS MADE AS OF DECEMBER 31,
----------------------------------------------------
FUND/SUB-ADVISER FISCAL YEAR 1998 FISCAL YEAR 1997 FISCAL YEAR 1996
- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C>
Select Emerging Markets Fund*
Schroder Capital Management International Inc. $ 167,193 N/A N/A
("SCMI")

Select Aggressive Growth Fund
Nicholas-Applegate Capital Management, L.P. $3,470,632 $2,885,239 $1,986,838

Select Capital Appreciation Fund**
T. Rowe Price Associates, Inc. ("T. Rowe") $1,332,970 $1,070,021 $ 538,873
</TABLE>

33
<PAGE>

<TABLE>
<CAPTION>
PAYMENTS MADE AS OF DECEMBER 31,
----------------------------------------------------
FUND/SUB-ADVISER FISCAL YEAR 1998 FISCAL YEAR 1997 FISCAL YEAR 1996
- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C>
Select Value Opportunity Fund
Cramer Rosenthal McGlynn, LLC ("CRM")*** $1,269,130 $ 851,815 $ 428,814

Select International Equity Fund
Bank of Ireland Asset Management (U.S.) Limited $1,498,759 $1,137,825 $ 665,639

Select Growth Fund
Putnam Investment Management, Inc. ("Putnam")**** $2,030,082 $1,328,717 $ 804,820

Select Strategic Growth Fund*
(Cambiar Investors, Inc.) $ 40,380 N/A N/A

Growth Fund
Miller Anderson & Sherrerd ("MAS")***** $2,979,910 $2,669,867 $2,330,558

Select Growth and Income Fund
John A. Levin & Co., Inc. ("JAL") $1,668,885 $1,159,260 $ 684,181

Select Income Fund
Standish, Ayer & Wood Inc. $ 265,038 $ 177,505 $ 133,205

Allmerica Asset Management, Inc.
Equity Index Fund, Investment Grade Income Fund,
Government Bond Fund and Money Market Fund $1,218,085 $ 911,548 $ 694,940
</TABLE>

* The Select Emerging Markets Fund and Select Strategic Growth Fund began
operations on February 20, 1998.

** The Select Capital Appreciation Fund began business operations on April
28, 1995. JCC was replaced by T. Rowe as Sub-Adviser for the Select
Capital Appreciation Fund on April 1, 1998. The total dollar amount paid
to JCC for the period January 1, 1998 through March 31, 1998 was
$345,171. The total dollar amount paid to T. Rowe for the period April
1, 1998 through December 31, 1998 was $987,799.

*** David L. Babson & Co., Inc. was replaced by Cramer Rosenthal McGlynn,
LLC as Sub-Adviser for the Select Value Opportunity Fund on January 1,
1997.

**** Provident Investment Counsel was replaced by Putnam as Sub-Adviser for
the Select Growth Fund on July 1, 1996. The total dollar amount paid to
Provident for the period January 1, 1996 through June 30, 1996 was
$372,442. The total dollar amount paid to Putnam for the period July 1,
1996 through December 31, 1996 was $432,378.

***** Includes payments to MAS for advisory services provided to certain other
accounts of First Allmerica.

****** JAL was replaced by J.P. Morgan Investment Management Inc. as Sub-
Adviser of the Select Growth and Income Fund on April 1, 1999.

The following table shows voluntary expense limitations which the Manager has
declared for each Fund and the operating expenses incurred for the fiscal year
ended December 31, 1998 for each Fund:

<TABLE>
<CAPTION>
PERCENTAGE OF AVERAGE DAILY ASSETS
----------------------------------
VOLUNTARY EXPENSE OPERATING
FUND LIMITATIONS EXPENSES+
---- ----------- ---------
<S> <C> <C>
Select Emerging Markets Fund ** 2.19%*
Select Aggressive Growth Fund 1.35% 0.99%
Select Capital Appreciation Fund 1.35% 1.13%
</TABLE>

34
<PAGE>

<TABLE>
<S> <C> <C>
Select Value Opportunity Fund 1.25% 0.94%
Select International Equity Fund 1.50% 1.01%
Select Growth Fund 1.20% 0.85%
Select Strategic Growth Fund 1.20% 1.14%*
Growth Fund 1.20% 0.46%
Equity Index Fund 0.60% 0.36%
</TABLE>

<TABLE>
<CAPTION>
PERCENTAGE OF AVERAGE DAILY ASSETS
----------------------------------
VOLUNTARY EXPENSE OPERATING
FUND LIMITATIONS EXPENSES+
---- ----------- --------
<S> <C> <C>
Select Growth and Income Fund 1.10% 0.70%
Select Income Fund 1.00% 0.64%
Investment Grade Income Fund 1.00% 0.52%
Government Bond Fund 1.00% 0.64%
Money Market Fund 0.60% 0.32%
</TABLE>

- ------------------------------------------------------------------------------
+Including reductions such as directed brokerage credits. See "Brokerage
Allocation - Directed Brokerage Program" in the SAI.

* Annualized

* * The Manager has agreed until further notice to waive voluntarily its
management fee in the event that expenses of the Select Emerging Markets Fund
exceed 2.00% of the Fund's average daily net assets. The amount of such waiver
will be limited to the net amount of management fees earned by the Manager from
the Fund after subtracting fees paid by the Manager to SCMI for sub-advisory
services.

The Manager will voluntarily reimburse its fees and any expenses above the
expense limitations. The expense limitations are voluntary and may be removed at
any time after a Fund's first fiscal year of operations with notice to existing
shareholders. The Manager reserves the right to recover from a Fund any fees,
within a current fiscal year period, which were reimbursed in that same year to
the extent that total annual expenses did not exceed the applicable expense
limitation. The expenses which are subject to the voluntary expense limitations
include management fees, independent accountant, legal and custodian fees;
recordkeeping expenses; fees and expenses of Trustees who are not affiliated
with the Manager; association membership dues, insurance; expenses for proxies,
prospectuses and reports to shareholders and fees associated with the
registration of Fund shares. Non-recurring and extraordinary expenses generally
are excluded in the determination of expense ratios of the Funds for purposes of
determining any applicable expense waiver or reimbursement. Quotations of yield
or total return for any period when an expense limitation is in effect will be
greater than if the limitation had not been in effect.

Each of the Management Agreement and sub-advisory agreements provides that
it may be terminated as to any Fund at any time by a vote of a majority in
interest of the shareholders of such Fund, by the Trustees or by the investment
adviser to such Fund without payment of any penalty on not more than 60 days'
written notice; provided, however, that the agreement will terminate
automatically in the event of its assignment. Each of the agreements will
continue in effect as to any Fund for a period of no more than two years from
the date of its executor only so long as such continuance is approved
specifically at least annually by the Trustees or by vote of a majority in
interest of the shareholders of such Fund. In either event, such continuance
also must be approved by vote of a majority of the Trustees who are not parties
to the agreement or interested persons of the Trust, the Manager or any sub-
adviser, cast in person at a meeting called for the purpose of voting such
approval. The Trust and Manager have obtained an order of exemption from the SEC
that would permit the Manager to enter into and materially amend sub-advisory
agreements with non-affiliated Sub-Advisers without obtaining shareholder
approval. Under such agreements, any liability of either the Manager or a sub-
adviser is limited to situations involving its willful misfeasance, bad faith,
gross negligence or reckless disregard of its obligations and duties.

As printed in Nelson's Directory of Plan Sponsors - 1998, following is a
listing of Schroder Capital Management International Inc.'s current
representative clients in emerging markets investments:

35
<PAGE>

- Georgia-Pacific - New York City Retirement Systems
- Idaho P.E.R.S. - NYS Teachers' Retirement Systems
- Intermountain Health Care - Orange County Retirement System
- ISPAT Inland Inc. - Utah State Retirement System
- L.A. City Employees Retirement - Virginia Retirement Systems
- Louisiana State E.R.S. - Washington State Investment Board
- Merck & Co.

A listing of Nicholas-Applegate Capital Management, L.P.'s current
representative clients is as follows:

- Champion International Corp. - Southwestern Bell Corporation
- Eastman Kodak - San Francisco City and County
- Johnson & Johnson - Unisys Corporation
- Screen Actors Guild-Producers - University of Notre Dame
- Pension and Health Plan - University of Southern California

A listing of T. Rowe Price Associates, Inc.'s current representative clients
is as follows:

- Allegheny Power System - New England Electric System
- Aloha Airlines - New York Power Authority
- Baltimore Gas & Electric - The Pittston Company
Company (BGE)
- The Black & Decker Corporation - Rochester Gas and Electric Corporation
- Blue Cross/Blue Shield of - Sanyo North American Corporation
Maryland
- Crown Central Petroleum - Shoprite Supermarkets, Inc.
Corporation
- Continental Airlines - The Standard Register Company
- Crawford & Company - State of Florida
- Data General Corporation - State of Illinois
- Electro Scientific Industries - State of Oklahoma
- Federal Deposit Insurance - Tri-City Medical Center
Corporation
- Hyatt Corporation - United States Fire Insurance Company
- Loews Corporation - Warner-Lambert Company
- Milliken & Company - Winn-Dixie Stores

A listing of Cramer Rosenthal McGlynn, LLC's current representative clients is
as follows:

- The Carnegie Institute - National Basketball Association
Players Pension Plan
- Central States Teamsters - New Mexico State Investment Council
- The UCLA Foundation - Niagara Mohawk Power Corp.
- College of Holy Cross - University of Cincinnati
- Indiana University Foundation - University of Illinois Foundation
- Maine State Retirement

A listing of Bank of Ireland Asset Management (U.S.) Limited's current
representative clients is as follows:

- CALSTRS - Pfizer Retirement Annuity Plan
- City of Dallas Employees' - Maryland State Retirement System
Retirement Fund
- Loyola Marymount University - Screen Actors Guild -Producers
Endowment Fund Pension Plan
- LTV Steel Corporation Pension
Fund - Tuft's University Endowment Fund
- Major League Baseball Players - Worcester County Retirement System
Benefit Plan

36
<PAGE>

A listing of Putnam Advisory Company, Inc.'s ("PAC")* current representative
clients is as follows:

- Betz Dearborn Inc. - New York Philharmonic Orchestra
- California Public Employees' - Parker-Hannifin Corporation
Retirement System - The Nemours Foundation
- Kemper Insurance - The Robert Wood Johnson Foundation
- Los Angeles County Employees' - United Furniture Workers, AFL-CIO
Retirement Association - U.S. Chamber of Commerce
- Matsushita Electric Corporation
of America

*(PAC is the institutional affiliate of Putnam Investment Management, Inc.)

A listing of Cambiar Investors, Inc.'s current representative clients is as
follows:

- American Hospital Association - Regent University
- AvMed Health Plan - Schurz Communication Retirement Plan
- Boeing Company - Sheet Metal Workers Local #20
- City Public Service of San - Taos Ski Valley Inc.
Antonio
- El Paso Community Foundation - Turlock Irrigation District Retirement
Plan
- Frank Russell Trust Company - United Airlines
- Hunter Douglas Retirement Plan - Viking Insurance Company
- Metropolitan Life - Waco Employees Profit Sharing Plan
- Nationwide Insurance
- New Mexico/West Texas Multicraft

A listing of Miller Anderson & Sherrerd LLP's current representative clients
is as follows:

- AT&T - New York Philharmonic Society
- Boeing Company - Philip Morris, Inc.
- Federal Reserve - Smithsonian Institution
- J. Paul Getty Trust - United Technologies Corporation
- University of Notre Dame

A listing of J.P. Morgan Investment Management Inc. representative clients is
as follows:

A listing of Standish, Ayer & Wood's current representative clients is as
follows:

- Archdiocese of Boston - City of Houston
- AT&T - New York Public Library
- BankAmerica - Northeastern University
- Harcourt General - Reinsurance Association
- General Cinema

A listing of AAM's current representative clients is as follows:

- First Allmerica - Hannibal Regional Hospital
- Citizens Insurance - Massachusetts Education and
- Hanover Insurance Government Association Workers
- City of Worcester Retirement Compensation Trust
System

37
<PAGE>

- Worcester County Contributory - Farm Credit System Association
Retirement System Captive Insurance Company

Under the terms of the Management Agreement, the Trust recognizes the
Manager's control of the name "Allmerica Investment Trust." The Trust agrees
that its right to use that name is non-exclusive and can be terminated by the
Manager at any time.

SERVICES AGREEMENTS

UNDERWRITER

Allmerica Investments, Inc. ("AII"), located at 440 Lincoln Street, Worcester,
Massachusetts 01653, (508) 855-1000, serves as the Trust's distributor pursuant
to a Distribution Agreement. The following is a list of persons who are
affiliated with both the Trust and AII.

<TABLE>
<CAPTION>
POSITION(S) HELD POSITION(S) HELD
NAME WITH THE TRUST WITH AII
---- ---------------- ----------------
<S> <C> <C>
David J. Mueller Vice President and Treasurer Vice President and
(Principal Accounting Officer) Controller

John F. O'Brien Chairman of the Board Director

Richard M. Reilly President Director
</TABLE>

FUND RECORDKEEPING SERVICES AGENT

Investors Bank & Trust Company ("IBT") replaced First Data Investor Services
Group, Inc. ("Investor Services Group") as the Trust's fund record keeping
services agent on April 1, 1999. IBT is located at 200 Clarendon Street, 16/th/
Floor, Boston, MA 02116. Under the terms of a Fund Accounting Services
Agreement, IBT provides certain services, including determination of the net
asset value per share of each of the Funds and maintenance of the accounting
records of the Trust. IBT is entitled to receive an annual fund recordkeeping
fee based on Fund assets and certain out-of-pocket expenses. The Manager is
responsible for the payment of the fund record keeping fee to IBT. The Fund
Accounting Services Agreement may be renewed or amended by the Trustees without
a shareholder vote. The Fund Accounting Services Agreement is terminable by
either party on 90 days' written notice. The Fund Accounting Services Agreement
(the "Agreement") with IBT is similar to the Agreement previously in effect with
Investor Services Group and provides for compensation on a(n) ________________
basis. The compensation paid to Investor Services Group is similar to the
compensation which will be paid to IBT in terms of total dollar amount paid. The
total fund recordkeeping fees paid to Investor Services Group for the following
periods were as follows:

DECEMBER 31, 1998 DECEMBER 31, 1997 DECEMBER 31, 1996
----------------- ----------------- -----------------

$883,909 $748,941 $544,206

CUSTODIAN

Investors Bank & Trust Company ("IBT"), 200 Clarendon Street, 16/th/ Floor,
Boston, MA 02116 replaced Bankers Trust Company as Custodian of the cash and
investment securities of the Trust on April 1, 1999. As such, IBT holds in
custody the Trust's portfolio securities and receives and delivers them upon
purchases and sales. The Custodian Agreement with IBT is similar to the
Agreement previously in effect with Bankers Trust Company including the total
dollar amount of compensation paid thereunder. The total fees paid to Bankers
Trust Company for custodial services for the following periods were as follows:

DECEMBER 31, 1998 DECEMBER 31, 1997 DECEMBER 31, 1996
----------------- ----------------- -----------------

$850,873 $743,606 $535,277

38
<PAGE>

INDEPENDENT ACCOUNTANTS

PricewaterhouseCoopers LLP, 160 Federal Street, Boston, Massachusetts 02110,
serves as the Fund's independent accountants providing audit and accounting
services including (i) examination of the annual financial statements, (ii)
assistance and consultation with respect to the preparation of filings with the
Securities and Exchange Commission, and (iii) review of annual income tax
returns.

BROKERAGE ALLOCATION AND OTHER PRACTICES

In accordance with the Management Agreement and sub-advisory agreements, the
respective Sub-Adviser has the responsibility for the selection of brokers for
the execution of purchases and sales of the securities in a given Fund's
portfolio subject to the direction of the Trustees. The Sub-Advisers place the
Funds' portfolio transactions with brokers and, if applicable, negotiate
commissions.

Broker-dealers may receive brokerage commissions on portfolio transactions of
the Funds. The Sub-Advisers also may place portfolio transactions with such
broker-dealers acting as principal, in which case no brokerage commissions are
payable but other transaction costs are incurred. The Funds have not dealt nor
do they intend to deal exclusively with any particular broker-dealer or group of
broker-dealers. It is each Fund's policy always to seek best execution. This
means that each Fund's portfolio transactions will be placed where the Fund can
obtain the most favorable combination of price and execution services in
particular transactions or as provided on a continuing basis by a broker-dealer,
and that the Fund will 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. In evaluating the execution services of a
broker-dealer, including the overall reasonableness of its brokerage commissions
paid, consideration is given to the firm's general execution and operational
capabilities and to its reliability, integrity and financial condition. Subject
to the practice of always seeking best execution, the Funds' securities
transactions may be executed by broker-dealers who also provide research
services (as defined below) to the Funds, the Sub-Advisers and the other clients
advised by the Sub-Advisers. Examples of such research services include reports
on specific companies or industries, economic and financial data, performance
measurement services, computer databases and pricing and appraisal services. The
sub-advisers may use all, some or none of such research services in providing
investment advisory services to each of its investment companies and other
clients, including the Funds. To the extent that such services are used, they
tend to reduce the expenses of the Sub-Advisers. In the opinion of the Sub-
Advisers it is impossible to assign an exact dollar value to such services.

BROKERAGE AND RESEARCH SERVICES

The agreements provide that, subject to such policies as the Trustees may
determine, the Sub-Advisers may cause a given Fund to pay a broker-dealer which
provides brokerage and research services an amount of commission for effecting a
securities transaction for that Fund in excess of the amount of commission which
another broker-dealer would have charged for effecting that transaction. As
provided in Section 28(e) of the Securities Exchange Act of 1934, "brokerage and
research services" include advice as to the value of securities; the
advisability of investing in, purchasing or selling securities; the availability
of securities or purchasers or sellers of securities; furnishing analyses and
reports concerning issuers, industries, securities, economic factors and trends;
portfolio strategy and performance of accounts; and effecting securities
transactions and performing functions incidental thereto (such as clearance and
settlement). The Sub-Advisers must determine in good faith that such greater
commission is reasonable in relation to the value of the brokerage and research
services provided by the executing broker-dealer viewed in terms of that
particular transaction or the overall responsibilities of the Sub-Advisers to
its respective Funds and all other clients. The Sub-Advisers also may consider
sales by broker-dealers of variable and group annuity contracts and variable
life insurance policies that contemplate the Funds as an investment option as a
factor in the selection of broker-dealers to execute portfolio transactions.

The other investment companies and clients advised by the Sub-Advisers
sometimes invest in securities in which the Funds also invest. A Sub-Adviser
also may invest for its own account in the securities in which the Funds invest.
If the Funds, such other investment companies and other clients of the Sub-
Advisers desire to buy or sell the same portfolio security at about the same
time, the purchases and sales normally are made as nearly as practicable on a
pro rata basis in proportion to the amounts desired to be purchased or sold by
each. It is recognized that in some cases this practice could have a detrimental
effect on the price or volume of the security as far as the Funds are concerned.
In other cases,

39
<PAGE>

however, it is believed that this practice may produce better executions. It is
the opinion of the Trustees that the desirability of retaining the Sub-Advisers
as investment advisers to their respective Funds outweighs the disadvantages, if
any, which might result from this practice.

Brokerage commissions for each of the last three years were as follows:

<TABLE>
<CAPTION>
FUND 1998 1997 1996
---- ---- ---- ----
<S> <C> <C> <C>
Select Emerging Markets Fund* $ 105,823 N/A N/A
Select Aggressive Growth Fund $1,812,711 $1,238,116 $929,338
Select Capital Appreciation Fund** $ 683,523 $ 474,666 $240,295
Select Value Opportunity Fund** $ 742,439 $ 649,306 $101,743
Select International Equity Fund $ 369,191 $ 453,544 $360,263
Select Growth Fund** $ 724,915 $ 459,136 $450,238
Select Strategic Growth Fund* $ 32,898 N/A N/A
Growth Fund** $1,522,185 $ 969,754 $838,998
Equity Index Fund $ 106,104 $ 100,012 $ 63,013
Select Growth and Income Fund** $1,032,489 $ 962,045 $561,049
Government Bond Fund $ 0 $ 0 $ 0
</TABLE>

* The Select Emerging Markets Fund and Select Strategic Growth Fund began
operations on February 20, 1998.

** The following are the reasons for the differences in the amounts of brokerage
commissions paid for the most recent fiscal year compared to either of the
two prior fiscal years:

(1) The differences in the amounts of brokerage commissions paid during the
last three fiscal years for the Select Capital Appreciation Fund are
due to a change in Sub-Advisers on April 1, 1998 and the ensuing
portfolio turnover.
(2) The differences in the amounts of brokerage commissions paid during the
last three fiscal years for the Growth Fund are due to portfolio
repositioning and normal portfolio activity trading.
(3) The differences in the amounts of brokerage commissions paid during the
last three fiscal years for the Select Value Opportunity Fund, Select
Growth Fund and Select Growth and Income Fund are attributable to
growth in the assets of each Fund.

The Select Income Fund, Investment Grade Income Fund, Government Bond Fund and
Money Market Fund did not incur brokerage commissions in any of these years.

DIRECTED BROKERAGE PROGRAM

Certain Funds managed by the Manager participate in a directed brokerage
program whereby the Funds receive credit for brokerage activity and apply those
credits toward the payment of Fund expenses. Such Funds have entered into an
agreement with certain brokers which rebate a portion of commissions as credits
toward Fund expenses. In addition, this program gives Fund management the
ability to direct brokerage by firms which sell insurance products sponsored by
First Allmerica Financial and its affiliates. This second aspect of the program,
which would be limited to 15% of total commissions, has not been implemented.
Such amounts earned by the Funds in 1996, 1997 and 1998 under such agreements
were as follows: [Need additional disclosure if Fund has acquired shares of its
regular brokers. See Rule 10b-1.]

<TABLE>
<CAPTION>
FUND 1998 1997 1996
---- ---- ---- ----
<S> <C> <C> <C>
Select Emerging Markets Fund* $ 561 N/A N/A
Select Aggressive Growth Fund $229,479 $221,364 N/A
Select Capital Appreciation Fund $ 41,567 N/A N/A
Select Value Opportunity Fund $ 96,620 $ 84,389 $ 19,715
Select International Equity Fund $ 24,678 $ 70,636 $ 52,998
Select Growth Fund $151,581 $ 90,962 $ 10,405
Select Strategic Growth Fund $ 5,373 N/A N/A
</TABLE>

40
<PAGE>

<TABLE>
<S> <C> <C> <C>
Growth Fund $208,457 $152,829 $124,205
Select Growth and Income Fund $175,705 $102,293 $ 77,523
</TABLE>

The Trust Declaration provides that all persons extending credit to,
contracting with, or having any claims against the Trust or a particular Fund
shall look only to the assets of the Trust or particular Fund for payment under
such credit, contract or claim, and neither the shareholders, Trustees, nor any
of the Trust's officers, employees or agents shall be personally liable thereof.
Under Massachusetts law, shareholders could, under certain circumstances, be
held liable for the obligations of the Trust. The Trust Declaration, however,
disclaims shareholder liability for acts or obligations of the Trust and
requires that notice of such disclaimer be given in each agreement, obligation
or instrument entered into or executed by the Trust or the Trustees. The Trust
Declaration provides for indemnification out of a Fund's property for all loss
and expense of any shareholder of that Fund held liable on account of being or
having been a shareholder. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is limited to circumstances in which
the Fund of which he or she was a shareholder would be unable to meet its
obligations.

Pursuant to the Trust Declaration, a Trustee is liable for his or her own
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of Trustee, but is not liable for
errors of judgment, mistakes of fact or law any act or omission in accordance
with the advice of counsel or other experts with respect to the meaning of the
Trust Declaration, or for failing to follow such advice.

CAPITAL STOCK AND OTHER SECURITIES

The Trust has an unlimited authorized number of shares of beneficial
interest which may be divided into an unlimited number of series of such shares,
and which are divided presently into 14 series of shares, one series underlying
each Fund. The Trust's shares are entitled to one vote per share (with
proportional voting for fractional shares). The rights accompanying Fund shares
are vested legally in the Separate Accounts. As a matter of policy, however,
holders of variable premium life insurance or variable annuity contracts funded
through the Separate Accounts have the right to instruct the Separate Accounts
as to voting Fund shares on all matters to be voted on by Fund shareholders.
Voting rights of the participants in the Separate Accounts are set forth more
fully in the prospectuses or offering circular relating to those Accounts.

Matters subject to a vote by the shareholders include changes in the
fundamental policies of the Trust as described in the Prospectus and the SAI,
the election or removal of Trustees and the approval of agreements with
investment advisers. A majority, for the purposes of voting by shareholders
pursuant to the 1940 Act, is 67% or more of the voting securities of an
investment company present at an annual or special meeting of shareholders if
50% of the outstanding voting securities of such company are present or
represented by proxy or more than 50% of the outstanding voting securities of
such company, whichever is less.

The Trust is not required to hold annual meetings of shareholders. The
Trustees or shareholders holding at least 10% of the outstanding shares may call
special meetings of shareholders.

The Trust Declaration provides that, on any matter submitted to a vote of
the shareholders, all shares shall be voted by individual series, except (1)
when required by the 1940 Act, shares shall be voted in the aggregate and not by
individual series, and (2) when the Trustees have determined that the matter
affects only the interests of one or more series, then only the shareholders of
such series shall be entitled to vote thereon.

Shares are freely transferable, are entitled to dividends as declared by
the Trustees and, on liquidation of the Trust, shareholders are entitled to
receive their pro rata portion of the net assets of the Fund of which they hold
shares, but not of any other Fund. Shareholders have no preemptive or conversion
rights.

41
<PAGE>

Trust and requires that notice of such disclaimer be given in each agreement,
obligation or instrument entered into or executed by the Trust or the Trustees.
The Trust Declaration provides for indemnification out of a Fund's property for
all loss and expense of any shareholder of that Fund held liable on account of
being or having been a shareholder. Thus, the risk of a shareholder incurring
financial loss on account of shareholder liability is limited to circumstances
in which the Fund of which he or she was a shareholder would be unable to meet
its obligations.

PURCHASE, REDEMPTION, AND PRICING OF SECURITIES BEING OFFERED

Shares of the Funds are sold in a continuous offering and currently may be
purchased only by Separate Accounts of First Allmerica or its subsidiaries. The
Separate Accounts are the funding mechanisms for variable annuity contracts and
variable life insurance policies. Shares of the Trust are also currently being
issued under separate prospectuses to Separate Accounts of Allmerica Financial
Life, First Allmerica and subsidiaries of First Allmerica which issue variable
or group annuity policies or variable premium life insurance policies ("mixed
funding"). Shares of the Trust may also be issued to Separate Accounts of
unaffiliated life insurance companies and qualified pension and retirement plans
outside of the separate account context ("shared funding"). The Trust may serve
as a funding vehicle for all types of variable annuity contracts and variable
life insurance contracts offered by various participating insurance companies
and for qualified plans. Although neither Allmerica Financial Life nor the
Trust currently foresees any disadvantage, it is conceivable that in the future
such mixed funding may be disadvantageous for variable or group annuity
policyowners or variable premium life insurance policyowners ("Policyowners").
The Trustees of the Trust intend to monitor events in order to identify any
conflicts that may arise between such Policyowners and to determine what action,
if any, should be taken in response thereto. If the Trustees were to conclude
that separate funds should be established for variable annuity and variable
premium life separate accounts, Allmerica Financial Life would pay the attendant
expenses.

As described in the Prospectus, shares of each Fund are sold and redeemed
at their net asset value as next computed after receipt of the purchase or
redemption order without the addition of any selling commission or "sales load."
The redemption price may be more or less than the shareholder's cost. Each
purchase is confirmed to the Separate Account in a written statement of the
number of shares purchased and the aggregate number of shares currently held.
Unlike the Money Market Fund which attempts to maintain a stable net asset
value, the net asset value of the other Funds will fluctuate.

The net asset value per share of each Fund is the total net asset value of
that Fund divided by the number of shares outstanding. The total net asset value
of each Fund is determined by computing the value of the total assets of that
Fund and deducting total liabilities, including accrued liabilities. The net
asset value of the shares of each Fund is determined once daily as of the close
of the New York Stock Exchange on each day on which the Exchange is open for
trading, and no less frequently than once daily on each other day (other than a
day during which no shares of the Fund were tendered for redemption and no order
to purchase or sell such shares was received by the Fund) in which there was a
sufficient degree in trading in the Fund's portfolio securities that the current
net asset value of the Fund's shares might be affected materially by changes in
the value of such portfolio securities.

Debt securities for which market quotations are not readily available are
valued at fair value by using valuation procedures approved in good faith by the
Trustees. As authorized by the Trustees, debt securities (other than short-term
obligations) of the Funds other than the Money Market Fund are valued on the
basis of valuations furnished by a pricing service which utilizes data
processing methods to determine valuations for normal, institutional-size
trading units of such securities. Such methods include the use of market
transactions for comparable securities and various relationships between
securities which generally are recognized by institutional traders. Short-term
obligations having remaining maturities of sixty (60) days or less are valued at
amortized cost.

42
<PAGE>

Short-term debt securities of the Funds other than the Money Market Fund
having a remaining maturity of more than sixty (60) days will be valued using a
"market-to-market" method based upon either the readily available market price
or, if reliable market quotations are not available, upon quotations by dealers
or issuers for securities of a similar type, quality and maturity. "Marking-to-
market" takes into account unrealized appreciation or depreciation due to
changes in interest rates or other factors which would influence the current
fair value of such securities.

All portfolio securities of the Money Market Fund will be valued by the
amortized cost method. The purpose of this method of calculation is to attempt
to maintain a constant net asset value per share of $1.00. No assurance can be
given that this goal can be attained. Amortized cost is an approximation of
market value determined by increasing systematically the carrying value of a
security acquired at a discount or reducing systematically the carrying value of
a security acquired at a premium, so that the carrying value is equal to
maturity value on the maturity date. It does not take into consideration
unrealized gains or losses. While the amortized cost method provides certainty
and consistency in portfolio valuation, it may result in valuations of portfolio
securities which are higher or lower than the prices at which the securities
could be sold. During such periods, the yield to investors in a Fund may differ
somewhat from that obtained if the Fund were to use mark-to-market value for its
portfolio securities. For example, if the use of amortized cost resulted in a
lower (higher) aggregate portfolio value on a particular day, a prospective
investor in the Fund would obtain a somewhat higher (lower) yield than would
result from marked-to-market valuation, and existing investors would receive
less (more) investment income.

The use of the amortized cost method of valuation by the Money Market Fund
is subject to rules of the Securities and Exchange Commission. Under the rules,
the Fund is required to maintain a dollar weighted average portfolio maturity of
90 days or less and to limit its investments to instruments which (1) its Sub-
Adviser, subject to the guidelines established by the Trustees, determines
present minimal credit risks; (2) have high quality ratings or are deemed
comparable, such that they are "eligible securities" as defined below; and (3)
have remaining maturity of thirteen months (397 days) or less at the time of
purchase, or are subject to a demand feature which reduces the remaining
maturity to thirteen months or less.

The Money Market Fund may purchase only "First or Second Tier eligible
securities" which are defined to include (1) securities which have received the
highest or second highest rating by at least two nationally recognized
statistical rating organizations ("NRSRO") or by only one NRSRO if only one has
rated the security and (2) securities which are unrated, but, in the Sub-
Adviser's opinion, are of comparable quality. The Money Market Fund may purchase
securities which were long-term at issuance but have a remaining maturity of
thirteen months or less at the time of purchase if (a) the issuer has comparable
short-term debt securities outstanding which are eligible securities or (b) the
issuer has no short-term rating and the securities have either no long-term
rating or a long-term rating in one of the two highest categories by an NRSRO.

The above standards must be satisfied at the time an investment is made. If
the quality of the investment later declines, the Fund (a) may dispose of the
security within five business days of the Sub-Adviser becoming aware of the new
rating, or (b) may continue to hold the investment, but the Trustees will
evaluate whether the security continues to present minimal credit risks.

As a part of the overall duty of care they owe to the Fund's shareholders,
the Trustees have established procedures reasonably designed to stabilize the
net asset value per share of the Money Market Fund as computed for the purpose
of distribution and redemption at $1.00 per share taking into account current
market conditions and the Fund's investment objective. At such reasonable
intervals as they deem appropriate in light of current market conditions, the
Trustees will compare the results of calculating the net asset value per share
based on amortized cost with the results based on available indications of
market value. If a difference of more than 1/2 of 1% occurs between the two
methods of valuation, the Trustees will consider taking whatever steps they deem
necessary to minimize any material dilution or other unfair results, such as
shortening the average portfolio maturity or realizing gains or losses.

TAXATION OF THE FUNDS OF THE TRUST

The Trust qualifies under Subchapter M of the Internal Revenue Code so that
the Trust will not be subject to federal income tax on any net income and any
capital gains to the extent they are distributed or are deemed to have been

43
<PAGE>

distributed to shareholders. See the prospectuses for the Separate Accounts for
tax consequences to investors.

UNDERWRITERS

Under a Distribution Agreement, AII has a nonexclusive right to use its
best efforts to obtain from investors unconditional orders for the continuous
offering of shares authorized for issuance by the Trust. AII does not receive
direct compensation for its services as distributor of the Trust. AII, at its
expense, may provide promotional incentives to dealers that sell variable
annuity contracts for which the Funds serve as investment vehicles.

CALCULATION OF PERFORMANCE DATA

The Trust may advertise performance information for the Funds and may
compare performance of the Funds with other investment or relevant indices. The
Funds may also advertise "yield", "total return" and other non-standardized
total return data. For the non-money market funds, "yield," is calculated
differently than for the Money Market Fund. The Money Market Fund may advertise
"yield" or "effective yield," ALL PERFORMANCE FIGURES ARE BASED ON HISTORICAL
EARNINGS AND ARE NOT INTENDED TO INDICATE FUTURE PERFORMANCE. A Fund's share
price, yield and total return may fluctuate in response to market conditions and
other factors, and the value of Fund shares when redeemed may be more or less
than their original cost.

YIELDS AND TOTAL RETURNS QUOTED FOR THE FUNDS INCLUDE THE EFFECT OF
DEDUCTING THE FUNDS' EXPENSES, BUT MAY NOT INCLUDE CHARGES AND EXPENSES
ATTRIBUTABLE TO A PARTICULAR INSURANCE PRODUCT. SINCE SHARES OF THE FUNDS CAN BE
PURCHASED ONLY THROUGH A VARIABLE ANNUITY OR VARIABLE LIFE CONTRACT, YOU SHOULD
REVIEW CAREFULLY THE PROSPECTUS OF THE INSURANCE PRODUCT YOU HAVE CHOSEN FOR
INFORMATION ON RELEVANT CHARGES AND EXPENSES. INCLUDING THESE CHARGES IN THE
QUOTATIONS OF THE FUNDS' YIELDS AND TOTAL RETURNS WOULD HAVE THE EFFECT OF
DECREASING PERFORMANCE. PERFORMANCE INFORMATION FOR THE INSURANCE PRODUCT MUST
ALWAYS ACCOMPANY, AND BE REVIEWED WITH, ANY PERFORMANCE INFORMATION QUOTED FOR
THE FUNDS.

YIELDS OF THE FUNDS OTHER THAN THE MONEY MARKET FUND

The 30-day (or one month) standard yields of the Funds other than the Money
Market Fund are calculated as follows:

YIELD = 2[( a - b + 1)/6/ - 1)]
-----
cd

Where: a = dividends and interest earned by a Fund during the period;
b = expenses accrued for the period (net of reimbursements);
c = the average daily number of shares outstanding during the
period entitled to receive dividends; and
d = the maximum offering price per share on the last day of the
period.

For the purpose of determining net investment income earned during the
period (variable "a" in the formula), dividend income on equity securities held
by a Fund is recognized by accruing 1/360 of the stated dividend rate of the
security each day that the security is in the Fund. Except as noted below,
interest earned on debt obligations held by a Fund is calculated by computing
the yield to maturity of each obligation based on the market value of the
obligation (including actual accrued interest) at the close of business on the
last business day of each month, or, with respect to obligations purchased
during the month, the purchase price (plus actual accrued interest) and dividing
the result by 360 and multiplying the quotient by the market value of the
obligation (including actual accrued interest) in order to determine the
interest income on the obligation for each day of the subsequent month that the
obligation is held by the Fund. For purposes of this calculation, it is assumed
that each month contains 30 days. The maturity of an obligation with a call
provision is the next call date on which the obligation reasonably may be
expected to be called or, if none, the maturity date. With respect to debt
obligations purchased at a discount or premium, the formula generally calls for
amortization of the discount or premium. The amortization schedule will be
adjusted monthly to reflect changes in the market value of such debt
obligations. Expenses accrued for the period (variable "b" in the formula)
include all recurring fees charged by

44
<PAGE>

a Fund to all shareholder accounts in proportion to the length of the base
period and the Fund's mean (or median) account size. Undeclared earned income
will be subtracted from the offering price per share (variable "d" in the
formula).

MONEY MARKET FUND - YIELD AND EFFECTIVE YIELD

The yield of the Money Market Fund refers to the net income generated by an
investment in the Fund over a stated seven-day period, expressed as an annual
percentage rate. Yield is computed by determining the net change (exclusive of
capital changes) in the value of a hypothetical pre-existing account having a
balance of 1 (one) share at the beginning of a seven-day calendar period,
dividing the net change in account value by the value of the account at the
beginning of the period, and multiplying the return over the seven-day period by
365/7. Thus the income is "annualized:" the amount of income generated by the
investment during the seven-day period is assumed to be generated each week over
a 52-week period and is shown as a percentage of the investment. For purposes
of the calculation, net change in account value reflects the value of additional
shares purchased with dividends from the original share and dividends declared
on both the original share and any additional shares, but does not reflect
realized gains or losses or unrealized appreciation or depreciation.

The effective yield is calculated similarly, but the income earned by an
investment in the Money Market Fund is assumed to be reinvested. The "effective
yield" will be slightly higher than the "yield" because of this compounding
effect.

TOTAL RETURN

The Funds may advertise total return. The total return shows what an
investment in each Fund would have earned over a specific period of time (one,
five, or ten years since commencement of operations, if less) assuming that all
distributions and dividends by the Fund were reinvested, and less all recurring
fees.

From time to time, the Fund may state its total return in advertisements
and investor communications. Total return may be stated for any relevant period
as specified in the advertisement or communication. Any statement of total
return or other performance data on the Fund will be accompanied by information
on the Fund's average annual total return over the most recent four calendar
quarters and the period from the Fund's inception of operations. The Fund also
may advertise aggregate annual total return information over different periods
of time.

A Fund's average annual total return is determined by reference to a
hypothetical $1,000 investment that includes capital appreciation and
depreciation for the stated period, according to the following formula:

P(1+T)n = ERV

Where: P = A hypothetical initial purchase of $1,000
T = average annual total return
n = number of years
ERV = Ending Redeemable Value of the hypothetical purchase at the
end of the period

Total return quoted in advertising reflects all aspects of the Fund's
return, including the effect of reinvesting dividends and capital gains
distributions, and any change in the Fund's net asset value per share over the
period.

AVERAGE ANNUAL RETURNS are calculated by determining the change in value of
a hypothetical investment in the Fund over a stated period, and calculating the
annually compounded percentage rate that would have produced the same result if
the rate of growth or decline in value has been constant over the period.
Average annual returns covering periods of less than one year are calculated by
determining the Fund's total return for the period, extrapolating that return
for a full year, and stating the result as an annual return. Because this method
assumes that performance will remain constant for the entire year when in fact
it is unlikely that performance will remain constant, average annual returns for
a partial year must be viewed as strictly theoretical information.

INVESTORS ALSO SHOULD BE AWARE THAT A FUND'S PERFORMANCE IS NOT CONSTANT
OVER TIME, BUT VARIES FROM YEAR TO YEAR. AVERAGE ANNUAL RETURN REPRESENTS
AVERAGED FIGURES AS OPPOSED TO THE ACTUAL PERFORMANCE OF THE FUND.

45
<PAGE>

A Fund also may quote cumulative total returns which reflect the simple
change in value of an investment over a stated period. Average annual total
returns and cumulative total returns may be quoted as a percentage or as a
dollar amount. They may be calculated for a single investment, for a series of
investments or for a series of redemptions over any time period. Total returns
may be broken down into their components of income and capital in order to show
their respective contributions to total return. Performance information may be
quoted numerically or in a table, graph or similar illustration.

OTHER PERFORMANCE INFORMATION

Performance information for a Fund may be compared with: (1) the S&P 500,
Dow Jones Industrial Average, Lehman Aggregate Bond Index, Russell 2000, Russell
3000, Beta Adjusted Russell 3000, Lehman Government corporate and 90 day
Treasury Bills, Solomon High Yield Bond Index, Bank Rate Monitor, NASDAQ Index
or other unmanaged indices so that investors may compare a Fund's results with
those of a group of unmanaged securities widely regarded by investors as
representative of the securities markets in general; (2) other registered
investment companies or other investment products tracked (a) by Lipper
Analytical Services; Morningstar, Inc. and IBC/Donoghue, Inc., all widely used
independent research firms which rank mutual funds and other investment
companies by overall performance, investment objectives and assets, or (b) by
other services, companies, publications or persons who rank such investment
companies on overall performance or other criteria; (3) or the Consumer Price
Index (a measure for inflation) to assess the real rate of return from an
investment in the Fund. Unmanaged indices may assume the reinvestment of
dividends but generally do not reflect deductions for administrative and
management costs and expenses.

All performance information is based on historical results and is not
intended to indicate future performance. Performance information reflects only
the performance of a hypothetical investment during the particular time period
on which the calculations are based. Performance information should be
considered in light of the investment objectives and policies, characteristics
and quality of the Fund and the market conditions during the given time period.
Yield and total return information may be useful for reviewing the performance
of the Fund and for providing a basis for comparison with other investment
alternatives. However, unlike bank deposits or other investments which pay a
fixed yield for a stated period of time, the yield and total return do
fluctuate.

PERFORMANCE INFORMATION FOR PERIOD ENDED DECEMBER 31, 1998

Set forth below is average annual total return information for the Select
Emerging Markets Fund, Select Aggressive Growth Fund, Select Capital
Appreciation Fund, Select Value Opportunity Fund, Select International Equity
Fund, Select Growth Fund, Select Strategic Growth Fund, Growth Fund, Equity
Index Fund, Select Growth and Income Fund, Select Income Fund, Investment Grade
Income Fund, Government Bond Fund and Money Market Fund for the 1 year, 5 year,
10 year and/or since inception (the Trust began operations on April 29, 1985)
periods ended December 31, 1998, yields for the Select Income Fund, Investment
Grade Income Fund and Government Bond Fund for the 30-day period ended December
31, 1998 and yield and effective yield information for the Money Market Fund for
the seven-day period ended December 31, 1998.

AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 1998
(UNAUDITED)

<TABLE>
<CAPTION>
1 Year Period 5 Year Period 10 Year Period Since Inception
-------------- -------------- --------------- ----------------
<S> <C> <C> <C> <C>
Select Emerging Markets Fund N/A N/A N/A (21.46)%*
Select Aggressive Growth Fund 10.56% 14.99% N/A 18.11 %
Select Capital Appreciation Fund 13.88% N/A N/A 20.37 %
Select Value Opportunity Fund 4.87% 13.09% N/A 14.71 %
Select International Equity Fund 16.48% N/A N/A 12.26 %
Select Growth Fund 35.44% 22.15% N/A 19.18 %
Select Strategic Growth Fund N/A N/A N/A (2.47)%*
Growth Fund 19.32% 19.01% 16.98% 16.64 %
Equity Index Fund 28.33% 23.39% N/A 20.69 %
</TABLE>

46
<PAGE>

<TABLE>
<S> <C> <C> <C> <C>
Select Growth and Income Fund 16.43% 17.82% N/A 15.53%
Select Income Fund 6.83% 6.05% N/A 6.56%
Investment Grade Income Fund 7.97% 6.95% 9.17% 8.97%
Government Bond Fund 7.67% 5.99% N/A 7.00%
Money Market Fund 5.51% 5.22% 5.62% 6.27%
</TABLE>

* Not Annualized

The Growth Fund, Investment Grade Income Fund and the Money Market Fund all
began business operations on April 29, 1985. The Equity Index Fund began
operations on September 28, 1990. The Government Bond Fund began operations on
August 26, 1991. The Select Aggressive Growth Fund, Select Growth Fund, Select
Growth and Income Fund and Select Income Fund began operations on August 21,
1992. The Select Value Opportunity Fund began operations on April 30, 1993. The
Select International Equity Fund began operations on May 2, 1994. The Select
Capital Appreciation Fund began operations on April 28, 1995. The Select
Emerging Markets Fund and Select Strategic Growth Fund began operations on
February 20, 1998.

YIELDS FOR 30-DAY PERIODS
ENDED DECEMBER 31, 1998
-----------------------
(Unaudited)

Select Income Fund 5.050%
Investment Grade Income Fund 5.080%
Government Bond Fund 4.400%

<TABLE>
<CAPTION>
YIELD FOR SEVEN DAY PERIOD EFFECTIVE YIELD FOR SEVEN DAY PERIOD
ENDED DECEMBER 31, 1998 ENDED DECEMBER 31, 1998
----------------------- -----------------------
(Unaudited) (Unaudited)
<S> <C> <C>
Money Market Fund 5.11% 6.03%
</TABLE>

FINANCIAL STATEMENTS

The Trust's Financial Statements and related notes and the report of the
independent accountants contained in the Trust's annual report for the fiscal
year ended December 31, 1998 are incorporated by reference into this Statement
of Additional Information.

47
<PAGE>

APPENDIX

Descriptions of Moody's Investors Service, Inc. ("Moody's") and Standard &
Poor's Ratings Service, a division of McGraw-Hill Companies, Inc. ("S&P")
commercial paper and bond ratings:

COMMERCIAL PAPER RATINGS

MOODY'S EMPLOYS THREE DESIGNATIONS, ALL JUDGED TO BE INVESTMENT GRADE, TO
INDICATE THE RELATIVE REPAYMENT CAPACITY OF RATED ISSUERS. THE TWO HIGHEST
DESIGNATIONS ARE AS FOLLOWS:

Issuers rated Prime-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1 repayment
capacity normally will be evidenced by the following characteristics:

- Leading market positions in well-established industries.

- High rates of return on funds employed.

- Conservative capitalization structures with moderate reliance on
debt and ample asset protection.

- Broad margins in earnings coverage of fixed financial charges and
high internal cash generation.

- Well-established access to a range of financial markets and assured
sources of alternate liquidity.

Issuers rated Prime-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This normally
will be evidenced by many of the characteristics cited above, but to a lesser
degree. Earnings trends and coverage ratios, while sound, will be subject more
to variation. Capitalization characteristics, while still appropriate, may be
more affected by external conditions. Ample alternate liquidity is maintained.

S&P COMMERCIAL PAPER RATINGS ARE GRADED INTO SEVERAL CATEGORIES, RANGING FROM
"A-1" FOR THE HIGHEST QUALITY OBLIGATIONS TO "D" FOR THE LOWEST. THE TWO
HIGHEST RATING CATEGORIES ARE DESCRIBED AS FOLLOWS:

A-1 - This highest category indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess extremely strong
safety characteristics are denoted with a plus (+) sign designation.

A-2 - Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated A-1.

MUNICIPAL OBLIGATIONS

Moody's ratings for state and municipal and other short-term obligations
will be designated Moody's Investment Grade ("MIG"). This distinction is in
recognition of the differences between short-term credit risk and long-term
risk. Factors affecting the liquidity of the borrower are uppermost in
importance in the short-term borrowing, while various factors of the first
importance in long-term borrowing risk are of lesser importance in the long run.
Symbols used will be as follows:

MIG-1 - This designation denotes best quality. There is present strong
protection by established cash flows, superior liquidity support or
demonstrated broad-based access to the market for refinancing.

MIG-2 - This designation denotes high quality. Margins of protection are
ample although not so large as in the preceding group.

48
<PAGE>

A short-term rating also may be assigned on an issue having a demand
feature. Such ratings will be designated as VMIG to reflect such characteristics
as payment upon periodic demand rather than fixed maturity dates and payment
relying on external liquidity. Additionally, investors should be alert to the
fact that the source of payment may be limited to the external liquidity with no
or limited legal recourse to the issuer in the event that demand is not met.
VMIG-1 and VMIG-2 ratings carry the same definitions as MIG-1 and MIG-2,
respectively.

DESCRIPTION OF MOODY'S BOND RATINGS

Aaa - Bonds that are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and generally are referred to
as "gilt edge". Interest payments are protected by a large or exceptionally
stable margin and principal is secure. While the various protective
elements are likely to change, such changes as can be visualized are most
unlikely to impair the fundamentally strong position of such issues.

Aa - Bonds that are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group, they comprise what are known
generally as high-grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than in Aaa securities.

A - Bonds that are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate, but elements
may be present that suggest a susceptibility to impairment some time in the
future.

Baa - Bonds that are rated Baa are considered to be medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present
but certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as
well.

Ba - Bonds that are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.

B - Bonds that are rated B generally lack characteristics of a desirable
investment. Assurance of interest and principal payments or maintenance of
other terms of the contract over any long period of time may be small.

Those bonds within the Aa, A, Baa, Ba, and B categories that Moody's
believes possess the strongest credit attributes within those categories
are designated by the symbols Aa1, A1, Baa1, Ba1, and B1.

DESCRIPTION OF S&P'S DEBT RATINGS

AAA - Debt rated AAA has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.

AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from AAA issues only in a small degree.

A - Debt rated A has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions than debt in higher rated
categories.

BBB - Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher rates
categories.

49
<PAGE>

BB, B, CCC, CC, C - Debt rated BB, B, CCC, CC, or C is regarded as having
predominantly speculative characteristics with respect to capacity to pay
interest and repay principal. BB indicates the least degree of speculation
and C the highest. While such debt will likely have some quality and
protective characteristics, these are outweighed by large uncertainties or
major exposures to adverse conditions.

Plus (+) or (-): The ratings from AA to CCC may be modified by the addition
of a plus or minus sign to show relative standing within the major
categories.

50
<PAGE>

PART C. OTHER INFORMATION

Item 23. Exhibits
--------

Exhibit 1 Agreement and Declaration of Trust, dated October 11, 1984, as
amended May 12, 1992 was filed previously in Post-effective
Amendment No. 36 on April 15, 1998 and is incorporated herein by
reference.

Exhibit 2 Bylaws as amended May 12, 1992 was filed previously in Post-
effective Amendment No. 36 on April 15, 1998 and is incorporated
herein by reference.

Exhibit 3 None

Exhibit 4(a) Management Agreement (the "Management Agreement") between
Registrant and Allmerica Financial Investment Management
Services, Inc. (the "Manager") dated April 16, 1998 is filed
herein.

Exhibit 4(b) Sub-Adviser Agreement between the Manager and Schroder Capital
Management International Inc. with respect to the Select Emerging
Markets Fund dated April 16, 1998 is filed herein.

Exhibit 4(c) Sub-Adviser Agreement between the Manager and Nicholas-Applegate
Capital Management, L.P. with respect to the Select Aggressive
Growth Fund dated April 16, 1998 is filed herein.

Exhibit 4(d) Sub-Adviser Agreement between the Manager and T. Rowe Price
Associates, Inc. with respect to the Select Capital Appreciation
Fund dated April 16, 1998 is filed herein.

Exhibit 4(e) Sub-Adviser Agreement between the Manager and Cramer Rosenthal
McGlynn, LLC dated April 16, 1998 with respect to the Select
Value Opportunity Fund is filed herein.

Exhibit 4(f) Sub-Adviser Agreement between the Manager and Bank of Ireland
Asset Management (U.S.) Limited with respect to the Select
International Equity Fund dated April 16, 1998 is filed herein.

Exhibit 4(g) Sub-Adviser Agreement between the Manager and Putnam Investment
Management, Inc. with respect to the Select Growth Fund dated
April 16, 1998 is filed herein.

Exhibit 4(h) Sub-Adviser Agreement between the Manager and Cambiar Investors,
Inc. with respect to the Select Strategic Growth Fund dated April
16, 1998 is filed herein.

Exhibit 4(i) Sub-Adviser Agreement between the Manager and Miller Anderson &
Sherrerd, LLP with respect to the Growth Fund dated April 16,
1998 is filed herein.

Exhibit 4(j) Form of Sub-Adviser Agreement between the Manager and J. P.
Morgan Investment Management Inc. with respect to the Select
Growth and Income Fund dated _________ is filed herein.

Exhibit 4(k) Sub-Adviser Agreement between the Manager and Standish, Ayer &
Wood, Inc. with respect to the Select Income Fund dated April 16,
1998 is filed herein.

1
<PAGE>

Exhibit 4(l) Sub-Adviser Agreement between the Manager and Allmerica Asset
Management, Inc. with respect to the Equity Index Fund,
Investment Grade Income Fund, Government Bond Fund and Money
Market Fund dated April 16, 1998 is filed herein.

Exhibit 5 Distribution Agreement with Allmerica Investments, Inc. dated
February 25, 1998 was filed previously in Post-effective
Amendment No. 36 on April 15, 1998 and is incorporated herein by
reference.

Exhibit 6 None

Exhibit 7 Custodian Agreement with Bankers Trust Company dated October 25,
1995 was filed previously in Post-effective Amendment No. 31 on
February 27, 1996 and is incorporated herein by reference.

Exhibit 7(a) Amended Exhibit A to the Custodian Agreement between Bankers
Trust Company and Allmerica Investment Trust dated January 9,
1998 was filed previously in Post-effective Amendment No. 36 on
April 15, 1998 and is incorporated herein by reference.

Exhibit 8 Form of Fund Accounting Services Agreement (the "Fund Accounting
Services Agreement") was filed previously in Post-effective
Amendment No. 20 on May 14, 1992 and is incorporated herein by
reference.

Exhibit 8(b) Notice with respect to the Fund Accounting Services Agreement
(Small Cap Value Fund) was filed previously in Post-effective
Amendment No. 26 on March 2, 1994 and is incorporated herein by
reference.

Exhibit 8(c) Notice with respect to the Fund Accounting Services Agreement
(Select International Equity Fund) was filed previously in Post-
effective Amendment No. 27 on October 27, 1994 and is
incorporated herein by reference.

Exhibit 8(d) Notice with respect to the Fund Accounting Services Agreement
(the Select Capital Appreciation Fund) was filed previously in
Post-effective Amendment No. 29 on April 28, 1995 and is
incorporated herein by reference.

Exhibit 8(e) Assignment of Contract and Consent to Assignment with respect to
the Fund Accounting Services Agreement was filed previously in
Post-effective Amendment No. 29 on April 28, 1995 and is
incorporated herein by reference.

Exhibit 8(f) Administration Agreement between Manager and The Shareholder
Services Group, Inc. (now known as First Data Investor Services
Group, Inc.) dated March 31, 1995 was filed previously in Post-
effective Amendment No. 31 on February 27, 1996 and is
incorporated herein by reference.

Exhibit 8(g) Form of Notice with respect to the Fund Accounting Services
Agreement (the Select Emerging Markets Fund and Select Strategic
Growth Fund Fund) was filed previously in Post-effective
Amendment No. 34 and is incorporated herein by reference.

Exhibit 9 Opinion and consent of counsel is filed herein.

Exhibit 10 None

<PAGE>

Exhibit 11 None

Exhibit 12 Participation Agreement among Registrant, Allmerica Financial
Investment Management Services, Inc. and First Allmerica
Financial Life Insurance Company dated February 16, 1999 is filed
herein.

Exhibit 12(a) Participation Agreement among Registrant, Allmerica Financial
Investment Management Services, Inc. and Allmerica Financial Life
Insurance and Annuity Company dated February 16, 1999 is filed
herein.

Exhibit 13 None

Exhibit 14 None

Exhibit 15 None

Exhibit 16 Power of Attorney dated February 16, 1999 is filed herein.

Item 24. Persons Under Common Control with Registrant
--------------------------------------------

Registrant was organized by State Mutual Life Assurance Company of America, now
known as First Allmerica Financial Life Insurance Company ("First Allmerica"),
primarily for the purpose of providing a vehicle for the investment of assets
received by various separate investment accounts ("Separate Accounts")
established by First Allmerica and life insurance company subsidiaries of First
Allmerica including Allmerica Life Insurance and Annuity Company ("Allmerica
Financial Life"). The assets in such Separate Accounts are, under state law,
assets of the life insurance companies which have established such accounts.
Thus at any time First Allmerica and its life insurance company subsidiaries
will own such of Registrant's outstanding shares as are purchased with Separate
Account assets; however, where required to do so, First Allmerica and its life
insurance company subsidiaries will vote such shares only in accordance with
instructions received from owners of the contracts pursuant to which sums are
placed in such Separate Accounts.

Item 25. Indemnification
---------------

Article VIII of Registrant's Agreement and Declaration Trust, entitled
"Indemnification," was filed previously in Post-effective Amendment No. 36 on
April 15, 1998 and is incorporated herein by reference.

Article III, Section 12 of the Bylaws of First Allmerica was filed previously in
Post-effective Amendment No. 36 on April 15, 1998 and is incorporated herein by
reference.

Item 26. Business and Other Connections of Investment Manager and Sub-
-------------------------------------------------------------
Advisers
--------

The following Schedule Ds of Form ADV are incorporated by reference: Nicholas-
Applegate Capital Management, L.P., File No. 801-21442; Allmerica Asset
Management, Inc., File No. 801-44189; Allmerica Financial Investment Management
Services, Inc., File No. 801-55463; Miller, Anderson & Sherrerd, LLP, File No.
801-10437; Bank of Ireland Asset Management (U.S.) Limited, File No. 801-29606;
J.P. Morgan Investment Management Inc., File No. 801-21011; T. Rowe Price
Associates, Inc., File No. 801-856; Putnam Investment Management, Inc., File No.
801-7974; Cramer Rosenthal McGlynn, LLC, File No. 801-55244; Standish, Ayer &
Wood, Inc., File No. 801-584; Schroder Capital Management International Inc.,
File No. 801-15834; and Cambiar Investors, Inc., File No. 801-9538.

<PAGE>

Item 27. Principal Underwriters
----------------------

(a) Allmerica Investments, Inc., the Distributor, does not act as principal
underwriter, depositor or investment adviser for any other investment
company.

(b) The following information is provided with respect to the directors and
officers of Allmerica Investments, Inc., the Distributor:

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Name and Principal Business Positions and Offices with Positions and Offices with
Address Distributor Registrant
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
John F. Kelly Director N/A
Allmerica Financial
440 Lincoln Street
Worcester, MA 01653
- -------------------------------------------------------------------------------------------------------
John F. O'Brien Director Trustee
Allmerica Financial
440 Lincoln Street
Worcester, MA 01653
- -------------------------------------------------------------------------------------------------------
Stephen Parker Director N/A
Allmerica Financial Chief Executive Officer
440 Lincoln Street President
Worcester, MA 01653
- -------------------------------------------------------------------------------------------------------
Richard M. Reilly Director Trustee, President
Allmerica Financial Life
Insurance and Annuity Company
440 Lincoln Street
Worcester, MA 01653
- -------------------------------------------------------------------------------------------------------
Eric A. Simonsen Director N/A
Allmerica Financial
440 Lincoln Street
Worcester, MA 01653
- -------------------------------------------------------------------------------------------------------
Emil J. Aberizk Jr. Vice President N/A
Allmerica Financial
440 Lincoln Street
Worcester, MA 01653
- -------------------------------------------------------------------------------------------------------
Abigail M. Armstrong Counsel N/A
Allmerica Financial Secretary/Clerk
440 Lincoln Street
Worcester, MA 01653
- -------------------------------------------------------------------------------------------------------
Edward T. Berger Chief Compliance Officer N/A
Allmerica Financial Vice President
440 Lincoln Street
Worcester, MA 01653
- -------------------------------------------------------------------------------------------------------
Richard F. Betzler Jr. Vice President N/A
Allmerica Financial
440 Lincoln Street
Worcester, MA 01653
- -------------------------------------------------------------------------------------------------------
</TABLE>

4
<PAGE>

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
Name and Principal Business Positions and Offices with Positions and Offices with
Address Distributor Registrant
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Philip J. Coffey Vice President N/A
Allmerica Financial
440 Lincoln Street
Worcester, MA 01653
- ---------------------------------------------------------------------------------------------------------
David J. Mueller Financial Operations Principal Vice President
Allmerica Financial Vice President Treasurer
440 Lincoln Street Principal Accounting Officer
Worcester, MA 01653
- ---------------------------------------------------------------------------------------------------------
Paul L. Foster Assistant Treasurer N/A
Allmerica Financial
440 Lincoln Street
Worcester, MA 01653
- ---------------------------------------------------------------------------------------------------------
Cecile T. Harrington Assistant Treasurer N/A
Allmerica Financial
440 Lincoln Street
Worcester, MA 01653
- ---------------------------------------------------------------------------------------------------------
Robert G. Juneau Assistant Treasurer N/A
Allmerica Financial
440 Lincoln Street
Worcester, MA 01653
- ---------------------------------------------------------------------------------------------------------
Joseph W. MacDougall Jr. Assistant Secretary Assistant Secretary
Allmerica Financial
440 Lincoln Street
Worcester, MA 01653
- ---------------------------------------------------------------------------------------------------------
William F. Monroe Jr. Vice President N/A
Allmerica Financial
440 Lincoln Street
Worcester, MA 01653
- ---------------------------------------------------------------------------------------------------------
Edward A. Ostrout Assistant Treasurer N/A
Allmerica Financial
440 Lincoln Street
Worcester, MA 01653
- ---------------------------------------------------------------------------------------------------------
Edward J. Parry III Treasurer N/A
Allmerica Financial
440 Lincoln Street
Worcester, MA 01653
- ---------------------------------------------------------------------------------------------------------
Mark G. Steinberg Senior Vice President N/A
Allmerica Financial
440 Lincoln Street
Worcester, MA 01653
- ---------------------------------------------------------------------------------------------------------
</TABLE>

Item 28. Location of Accounts and Records
--------------------------------

Each account, book, or other document required to be maintained by Registrant
pursuant to Section 31(a) of

5
<PAGE>

the Investment Company Act of 1940, as amended and Rules 31a-1 to 31a-3
thereunder are maintained by Registrant at 440 Lincoln Street, Worcester,
Massachusetts 01653 or on behalf of the Registrant by Investors Bank & Trust
Company, 200 Clarendon Street, 16th Floor, Boston, MA 02116.

Item 29. Management Services
-------------------

Not applicable

Item 30. Undertakings
------------

Not applicable

6
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act and the Investment Company
Act, Allmerica Investment Trust has duly caused this Registration Statement to
be signed on its behalf by the undersigned, duly authorized, in the City of
Worcester and Commonwealth of Massachusetts on the 16th day of February, 1999.

ALLMERICA INVESTMENT TRUST
--------------------------

By: /s/ Richard M. Reilly
---------------------
Richard M. Reilly, President

Pursuant to the requirements of the Securities Act, this Registration Statement
has been signed below by the following persons in the capacities and on the
date(s) indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ Richard M. Reilly President, Chief Executive Officer February 16, 1999
- -------------------------
Richard M. Reilly and Trustee

/s/ John F. O'Brien Chairman of the Board and Trustee February 16, 1999
- -------------------------
John F. O'Brien

/s/ David J. Mueller Treasurer (Principal Accounting Officer) February 16, 1999
- -------------------------
David J. Mueller

/s/ P. Kevin Condron Trustee February 16, 1999
- -------------------------
P. Kevin Condron

/s/ Cynthia A. Hargadon Trustee February 16, 1999
- -------------------------
Cynthia A. Hargadon

/s/ Gordon Holmes Trustee February 16, 1999
- -------------------------
Gordon Holmes

/s/ John P. Kavanaugh Trustee February 16, 1999
- -------------------------
John P. Kavanaugh

/s/ Bruce E. Langton Trustee February 16, 1999
- -------------------------
Bruce E. Langton

/s/ Attiat F. Ott Trustee February 16, 1999
- -------------------------
Attiat F. Ott

/s/ Ranne P. Warner Trustee February 16, 1999
- -------------------------
Ranne P. Warner
</TABLE>
<PAGE>

EXHIBIT INDEX

Number Description
- ------ -----------

Exhibit 4(a) Management Agreement between Registrant and Allmerica Financial
Investment Management Services, Inc. (the "Manager")

Exhibit 4(b) Sub-Adviser Agreement between the Manager and Schroder Capital
Management International Inc. with respect to the Select Emerging
Markets Fund

Exhibit 4(c) Sub-Adviser Agreement between the Manager and Nicholas-Applegate
Capital Management, L.P. with respect to the Select Aggressive
Growth

Exhibit 4(d) Sub-Adviser Agreement between the Manager and T. Rowe Price
Associates, Inc. with respect to the Select Capital Appreciation
Fund

Exhibit 4(e) Sub-Adviser Agreement between the Manager and Cramer Rosenthal
McGlynn, LLC with respect to the Select Value Opportunity Fund

Exhibit 4(f) Sub-Adviser Agreement between the Manager and Bank of Ireland
Asset Management (U.S.) Limited with respect to the Select
International Equity Fund

Exhibit 4(g) Sub-Adviser Agreement between the Manager and Putnam Investment
Management, Inc. with respect to the Select Growth Fund

Exhibit 4(h) Sub-Adviser Agreement between the Manager and Cambiar Investors,
Inc. with respect to the Select Strategic Growth Fund

Exhibit 4(i) Sub-Adviser Agreement between the Manager and Miller Anderson &
Sherrerd, LLP with respect to the Growth Fund

Exhibit 4(j) Form of Sub-Adviser Agreement between the Manager and J.P. Morgan
Investment Management Inc. with respect to the Select Growth and
Income Fund

Exhibit 4(k) Sub-Adviser Agreement between the Manager and Standish, Ayer &
Wood, Inc. with respect to the Select Income Fund

Exhibit 9 Opinion and consent of counsel

Exhibit 12 Participation Agreement among Registrant, Allmerica Financial
Investment Management Services, Inc. and First Allmerica
Financial Life Insurance Company

<PAGE>

Exhibit 12(a) Participation Agreement among Registrant, Allmerica Financial
Investment Management Services, Inc. and Allmerica Financial Life
Insurance and Annuity Company

Exhibit 16 Power of Attorney

<PAGE>

EXHIBIT 4(a)

MANAGEMENT AGREEMENT

Allmerica Financial Investment Management Services, Inc. (the "Adviser") and
Allmerica Investment Trust ("Trust") hereby confirm their Agreement covering
services as hereinafter set forth. The terms and provisions of this Agreement
shall take effect on April 16, 1998.

1. The Trust hereby retains the Adviser as investment adviser for the series
of shares of the Trust as listed on Schedule A attached hereto and for such
other series of shares as the Trust and the Adviser may from time to time
agree on, each such series of shares being hereinafter referred to as a
"Fund." The Adviser shall also manage, supervise and conduct the other
affairs and business of the Trust and matters incidental thereto, subject
always to the provisions of the Trust's Agreement and Declaration of Trust,
Bylaws and of the provisions of the Investment Company Act of 1940, as
amended ("1940 Act"). In providing and performing such services, the
Adviser will function in cooperation with and subject always to the
direction and control of the Trustees of the Trust and in cooperation with
the Trust's authorized officers and representatives.

2. Investment Advisory Services. The Adviser agrees to act as the investment
----------------------------
adviser for, and to manage the investment of assets of, each Fund and to
make purchases and sales of securities for each Fund's account. The Adviser
shall assume responsibility for the management of the portfolio securities
of each Fund and the making and execution of all investment decisions for
each Fund.

A. Investment of each Fund's assets shall be in accordance with the
objectives and policies of each Fund as set forth in the current
Registration Statement of the Trust filed with the Securities and
Exchange Commission (the "SEC"), and any applicable federal and state
laws.

B. The Adviser shall report to the Trustees of the Trust (the "Trustees")
at such times and in such detail as the Trustees may from time to time
determine to be appropriate in order to permit the Trustees to
determine the adherence by the Adviser to the investment policies and
legal requirements of each Fund.

C. The Adviser shall place all orders for the purchase and sale of
portfolio investments for the account of the Funds with issuers,
brokers or dealers selected by the Adviser which may include brokers
or dealers affiliated with the Adviser. In the selection of such
brokers or dealers and the placing of such orders, the Adviser shall
always seek best execution (except to the extent permitted by the next
sentence hereof), which is to place portfolio transactions where the
Trust can obtain the most favorable combination of price and execution
services in particular transactions or provided on a continuous 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 Adviser shall not be
<PAGE>

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 which is in excess of the amount of commission
another broker or dealer would have charged for effecting that
transaction, if the 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 transaction or the overall
responsibilities of the Adviser and its affiliates with respect to the
Trust and to other clients as to which the Adviser or any affiliate of
the Adviser exercises investment discretion.

D. Subject to the provisions of the Trust's Agreement and Declaration of
Trust and the 1940 Act, the Adviser, at its expense, may select and
contract with one or more investment advisers (the "Sub-Advisers") to
provide to the Adviser such investment advice relating to the assets
of a Fund and related services as the Adviser may from time to time
deem appropriate, or delegate any or all of its functions hereunder to
one or more Sub-Advisers, provided that the Trustees shall approve any
such contract with a Sub-Adviser. So long as any Sub-Adviser serves as
investment adviser to any Fund pursuant to a Sub-Adviser Agreement in
substantially the form attached hereto as Exhibit A (the "Sub-Adviser
Agreement"), the obligation of the Adviser under this Agreement with
respect to managing the investment portfolio of such Fund shall be,
subject in any event to the control of the Trustees, to determine and
review with such Sub-Adviser the investment objectives, policies and
restrictions and placing of all orders for the purchase and sale of
portfolio securities for such Fund, all as further described in the
Sub-Adviser Agreement. The Adviser will compensate any Sub-Adviser of
any Fund for its services to such Fund. The Adviser may terminate the
services of any Sub-Adviser at any time, subject to the approval of
the Trustees, and shall at such time assume the responsibilities of
such Sub-Adviser unless and until a successor Sub-Adviser is selected.

3. Management Services. The Adviser will perform (or arrange for the
-------------------
performance by its affiliates) the management and administrative
services necessary for the operation of the Trust.

A. Subject to the supervision of the Trustees, and unless otherwise
provided herein the Adviser shall be responsible for the day to
day business activities of the Trust and shall perform all
services appropriate thereto, including: (i) providing for
members of its organization to serve without salaries as
Trustees, officers, or agents of the Trust; (ii) furnishing at
its expense such office space as may be necessary for the
suitable conduct of the Trust's business (other than pricing and
bookkeeping) and all necessary light, heat, telephone service,
office equipment stationery, and stenographic, clerical,

2
<PAGE>

mailing and messenger service in connection with such office;
(iii) on behalf of the Funds of the Trust, supervising relations
with, and monitoring the performance of, custodians,
depositories, transfer and pricing agents, accountants,
attorneys, underwriters, brokers and dealers, insurers and other
persons in any capacity deemed to be necessary or desirable; (iv)
preparing all general shareholder communications, including
shareholder reports; (v) conducting shareholder relations; (vi)
maintaining the Trust's existence and its records; (vii) during
such times as shares are publicly offered, maintaining the
registration and qualification of the Trust's shares under
federal and state law; and (viii) investigating the development
of management and shareholder services (and, if appropriate,
assisting in the development and implementation of such services)
designed to enhance the value or convenience of the Funds of the
Trust as investment vehicles.

B. The Adviser shall also furnish such reports, evaluations,
information or analyses to the Trust as the Trustees may request
from time to time or as the Adviser may deem to be desirable. The
Adviser shall make recommendations to the Trustees with respect
to Fund policies, and shall carry out such policies as are
adopted by the Trustees. The Adviser shall, subject to review by
the Trustees, furnish such other services as the Adviser shall
from time to time determine to be necessary or useful to perform
its obligations under this Agreement. Should the Trust have
occasion to call upon the Adviser for services not herein
contemplated or through the Adviser to arrange for the services
of others, the Adviser will act for the Trust upon request to the
best of its ability, the compensation for its services to be
agreed upon with respect to each such occasion as it arises.

C. The Adviser will not furnish the Trust the following services
under this Agreement:

(i) determinations of the Trust's net assets and the net asset
value per share of its shares ("pricing");

(ii) maintenance of accounts, books and records as required by
Section 31(a) of the 1940 Act and the rules thereunder
("bookkeeping"); and

(iii) provision of custodian services, transfer agent services,
dividend disbursement and reinvestment services,
shareholder services, or shareholder recordkeeping
services.

4. Expenses of the Trust. It is understood that the Trust will pay all
---------------------
its expenses other than those expressly stated to be payable by the
Adviser hereunder. The expenses

3
<PAGE>

payable by the Trust shall include, without limitation; (i) interest
and taxes; (ii) brokerage commissions and other costs in connection
with the purchase or sale of securities and other investment
instruments; (iii) fees and expenses associated with pricing and
bookkeeping;. (iv) fees and expenses of its Trustees other than those
who are "interested persons" of the Trust or the Adviser; (v) legal
and audit expenses; (vi) custodian, registrar and transfer agent fees
and expenses; (vii) fees and expenses related to the registration and
qualification of the Trust and the Fund's shares for distribution
under state and federal securities laws; (viii) expenses of printing
and mailing reports and notices and proxy material to shareholders of
the Funds; (ix) all other expenses incidental to holding meetings of
the Trust's shareholders, including proxy solicitations therefor; (x)
insurance premiums for fidelity and other coverage; (xi) its
proportionate share of association membership dues; (xii) expenses of
typesetting for printing Prospectuses and Statements of Additional
Information and supplements thereto; (xiii) expenses of printing and
mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders: and (ix) such non-
recurring or extraordinary expenses as may arise, including those
relating to actions, suits or proceedings to which the Trust is a
party and the legal obligation which the Trust may have to indemnify
the Trust's Trustees and officers with respect thereto.

5. Compensation. As full compensation for the services furnished and
------------
expenses borne by the Adviser herein, the Trust will pay a monthly fee
to the Adviser, computed and paid monthly at an annual rate of the
average daily net assets of each Fund, as described in Schedule B
which is attached hereto.

The fee computed with respect to the net assets of each Fund shall
be paid from the assets of such Fund. The average daily net assets of
each 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. The fee for each month shall be payable within five (5)
business days after the end of the month.

In the event that expenses of any Fund for any fiscal year should
exceed the expense limitation on investment company expenses imposed
by any statute or regulatory authority of any jurisdiction in which
shares of the Fund are then qualified for offer and sale, the
compensation due the Adviser such period shall be reduced by the
amount of such excess by a reduction or refund thereof, subject to
readjustment during the Fund's fiscal year. In the event that the
expenses with respect to any Fund should exceed any expense limitation
which the Adviser may, by written notice to the Trust, voluntarily
declare to be effective, subject to such terms and conditions as the
Adviser may prescribe in the notice, the compensation due the Adviser
shall be reduced, and, if necessary, the Adviser shall bear expenses
with respect to the Fund, to the extent required by the expense
limitation.

4
<PAGE>

If the 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.

In addition to the foregoing, the Trust will reimburse the Adviser
for the traveling and incidental expenses (other than the regular
Worcester office expenses described above) which may be incurred in
connection with special work performed at its request.

6. Limitation of Liability. The Adviser shall be under no liability to
-----------------------
the Trust or its Shareholders or creditors for any matter or thing in
connection with the performance of any of the 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 Adviser against any
liability to the Trust by reason of the 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.

7. Amendment. This Agreement may be amended at any time by mutual consent
---------
of the parties, provided that such amendment shall have been approved
(i) by vote of a majority of the outstanding voting securities of each
Fund affected by such amendment, and (ii) by vote of a majority of the
Trustees of the Trust who are not interested persons of the Adviser or
any Sub-Adviser or of the Trust, cast in person at a meeting called
for the purpose of voting on such approval.

8. Termination. 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 through May 30, 1998, and shall continue
in full force and effect for successive periods of one year
thereafter, but only so long as each such continuance is approved
(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 Adviser 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 Agreement as provided herein, the Adviser may continue to
serve hereunder in a manner consistent with the 1940 Act and the
rules and regulations thereunder.

5
<PAGE>

B. This Agreement may be terminated as to any Fund without the
payment of any penalty 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 Adviser on sixty days'
written notice.

C. This Agreement shall automatically terminate in the event of its
assignment.

9. Agreement and Declaration of Trust. A copy of the Trust's Agreement
----------------------------------
and Declaration is on file with the Secretary of State of the
Commonwealth of Massachusetts, and notice is hereby given that this
instrument is executed by the 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
Trust.

10. Other Agreements, etc. 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 Adviser, and in any person controlled by or under common
control with the Adviser, and that the Adviser and any person
controlled by or under common control with the Adviser may have an
interest in the Trust. It is also understood that the Adviser and
persons controlled by or under common control with the Adviser have
and may have advisory, management service or other contracts with
other organizations and persons, and may have other interests and
businesses.

11. Miscellaneous. The Adviser, its directors, officers, and its employees
-------------
retain the right to engage in other business, and to render portfolio
management, investment advisory, or other services of any kind to any
other corporation, firm, individual, or association. Neither the
Adviser nor any officer, director, or shareholder of the Adviser shall
act as principal or receive any compensation in connection with the
purchase or sale of securities by or on behalf of the Trust other than
the compensation provided in this Agreement.

The Adviser is an independent contractor and not an agent of the
Trust.

The Trust recognizes the Adviser's control of the names "SMA
Investment Trust" and "Allmerica Investment Trust" and agrees that its
right to use such names is non-exclusive and can be terminated by the
Adviser at any time. The use of such names will be terminated
automatically if at any time the Adviser or affiliate of the Adviser
ceases to be investment adviser for the Trust.

For the purposes of this Agreement, majority of the outstanding voting
securities of a Fund at any annual or special meeting shall mean a
concurring vote of (i) 67% or more of the shares of the Fund
represented at such meeting, if more than 50%

6
<PAGE>

of the outstanding shares of the Fund are represented in person or by
proxy, or (ii) 50% of the outstanding shares of the Fund, whichever is
less.

For the purposes of this Agreement, the terms "interested person" and
"assignment" shall have their respective meanings defined in the 1940
Act, 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.

Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the
Securities and Exchange Commission, the NASD and State insurance
regulators) and shall permit such authorities reasonable access to its
books and records in connection with any investigation or inquiry
relating to this Agreement or the transactions contemplated hereby.

Notwithstanding the generality of the foregoing, each party hereto
further agrees to furnish the California Insurance Commissioner, or
the Insurance Commissioner of any other state, with any information or
reports in connection with services provided under this Agreement
which such Commissioner may reasonably request in order to ascertain
whether the variable contracts operations of the Company are being
conducted in a manner consistent with the state's regulations
concerning variable contracts and any other applicable law or
regulations.

This Agreement shall be effective on the date executed. Executed this
16th day of April, 1998.

ALLMERICA FINANCIAL INVESTMENT
MANAGEMENT SERVICES, INC.

/s/ Julia Fletcher By: /s/ Richard M. Reilly
- ------------------------- ---------------------------
Witness

ALLMERICA INVESTMENT TRUST

/s/ Julia Fletcher By: /s/ Thomas P. Cunningham
- ------------------------- ---------------------------
Witness

7
<PAGE>

SCHEDULE A
SERIES OF SHARES OF THE TRUST
EFFECTIVE AS OF APRIL 16, 1998

Select Emerging Markets Fund
Select Aggressive Growth Fund
Select Capital Appreciation Fund
Select Value Opportunity Fund
Select International Equity Fund
Select Growth Fund
Select Strategic Growth Fund
Growth Fund
Equity Index Fund
Select Growth and Income Fund
Select Income Fund
Investment Grade Income Fund
Government Bond Fund
Money Market Fund

8
<PAGE>

SCHEDULE B
COMPENSATION
EFFECTIVE AS OF JUNE 1, 1998

As full compensation for the services furnished and expenses borne by the
Adviser herein, the Trust will pay a monthly fee to the Adviser, computed and
paid monthly at an annual rate of the average daily net assets of each Fund, as
described below:

Select Select Select Capital Select Value Select Select
Emerging Aggressive Appreciation Opportunity International Growth
Markets Fund Growth Fund Fund Fund Equity Fund Fund
------------ ----------- -------------- ------------ ------------- ------
<S> <C> <C> <C> <C> <C> <C>

Manager Fee 1.35% (1) (1) (2) (1) (2)
<CAPTION>

Select
Strategic Equity Select Growth Select Investment
Growth Growth Index and Income Income Grade Income
Fund Fund Fund Fund Fund Fund
--------- ------ ------ ------------- ------ ------------
<S> <C> <C> <C> <C> <C> <C>

Manager Fee 0.85% (1) (3) (1) (4) (4)

<CAPTION>
Government Money
Bond Market
Fund Fund
---------- ------
<S> <C> <C>

Manager Fee 0.50% (3)
</TABLE>

- --------------------------------------------------------------------------------

Select Select Growth
Select Aggressive Select Capital International and Income
Assets Growth Fund Appreciation Fund Equity Fund Growth Fund Fund
- ---------------------------------------- ----------------- ----------------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
First $100 Million................... 1.00% 1.00% 1.00% 0.60% 0.75%
$100 to $250 Million................. 0.90% 0.90% 0.90% 0.60% 0.70%
$250 to $500 Million................. 0.85% 0.85% 0.85% 0.40% 0.65%
Over $500 Million.................... 0.85% 0.85% 0.85% 0.35% 0.65%

</TABLE>

9
<PAGE>

(2) The Manager's fee for the Select Value Opportunity Fund and Select Growth
Fund, computed daily at an annual rate based on the average daily net assets
of each Fund, are based on the following schedules:

<TABLE>
<CAPTION>
Select
Value Select
Opportunity Growth
Assets Fund Fund
------ ------ ----
<S> <C> <C>
First $100 Million.......... 1.00% 0.85%
Next $150 Million........... 0.85% 0.85%
Next $250 Million........... 0.80% 0.80%
Next $250 Million........... 0.75% 0.75%
Over $750 Million........... 0.70% 0.70%
</TABLE>

(3) The Manager's fees for the Equity Index Fund and Money Market Fund, computed
daily at an annual rate based on the average daily net assets of each Fund,
are based on the following schedule:

Equity Money
Index Market
Assets Fund Fund
------ ------ ------
<S> <C> <C>
First $50 Million...... 0.35% 0.35%
Next $200 Million...... 0.30% 0.25%
Over $250 Million...... 0.25% 0.20%

</TABLE>
(4) The Manager's fees for the Select Income Fund and Investment Grade Income
Fund, computed daily at an annual rate based on the average daily net assets
of each Fund, are based on the following schedule:

Select Investment
Income Grade
Assets Fund Income Fund
------ ------ -----------
<S> <C> <C>
First $50 Million........ 0.60% 0.50%
Next $50 Million......... 0.55% 0.45%
Over $100 Million........ 0.45% 0.40%

</TABLE>

<PAGE>

EXHIBIT 4(b)

SUB-ADVISER AGREEMENT

SUB-ADVISER AGREEMENT executed as of April 16, 1998 between ALLMERICA
FINANCIAL INVESTMENT MANAGEMENT SERVICES, INC. (the "Manager") and SCHRODER
CAPITAL MANAGEMENT INTERNATIONAL 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 SELECT EMERGING MARKETS
FUND (the "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
Fund, 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 Fund. 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, at its expense, will furnish (i) all investment and
management facilities, including salaries of personnel necessary for it
to perform the duties set forth in this Agreement, and (ii)
administrative facilities, including clerical personnel and equipment
necessary for the conduct of the investment affairs of the Fund
(excluding brokerage expenses and pricing and bookkeeping services).

1
<PAGE>

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 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.

(d) In addition to being registered as an investment adviser in the United
States, the Sub-Adviser is regulated in the conduct of its investment
business in the United Kingdom by the Investment Management Regulatory
Organization Limited ("IMRO"). The Sub-Adviser confirms that the Trust
is a Non-private Customer as defined by IMRO.

2. OTHER AGREEMENTS

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 attached 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

2
<PAGE>

outstanding voting securities of the Fund, if such approval is required
under the Investment Company Act of 1940, as amended ("1940 Act"), 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 through January 9, 2000, 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 the 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 the Fund for their approval and such shareholders fail
to approve such continuance of this Agreement as provided herein, the
Sub-Adviser may continue to serve hereunder in a manner consistent with
the 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, in each case 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 with the Manager shall have terminated for any
reason.

(d) In the event of termination of this Agreement, the Fund will no longer
use the name "Schroder", "Schroder Capital Management International" or
"Schroder Capital Management International Inc." in materials relating
to the Fund except as may be required by the 1940 Act and the rules and
regulations thereunder.

6. CERTAIN DEFINITIONS

3
<PAGE>

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. NON-LIABILITY 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 Trust's 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 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.

4
<PAGE>

IN WITNESS WHEREOF, ALLMERICA FINANCIAL INVESTMENT MANAGEMENT SERVICES, INC. has
caused this instrument to be signed in duplicate on its behalf by its duly
authorized representative and SCHRODER CAPITAL MANAGEMENT INTERNATIONAL 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 FINANCIAL INVESTMENT
MANAGEMENT SERVICES, INC.

By: /s/ Richard M. Reilly
-------------------------------------------

Title: President
----------------------------------------

SCHRODER CAPITAL MANAGEMENT INTERNATIONAL INC.

By: /s/ Sharon Haugh
-------------------------------------------

Title: Director
----------------------------------------

Accepted and Agreed to as of the day and year first above written:

ALLMERICA INVESTMENT TRUST

By: /s/ Thomas P. Cunningham
-------------------------------------------
Title: Vice President and Treasurer
----------------------------------------

5
<PAGE>

SCHEDULE A
----------

The Manager will pay to the Sub-Adviser as full compensation for the Sub-
Adviser's services rendered, a fee computed daily and paid quarterly at an
annual rate of the average daily net assets of the Fund as described below:

NET ASSETS FEE RATE
---------- --------
First $50 Million 1.00%
Next $50 Million 0.85%
Next $150 Million 0.75%
Over $250 Million 0.60%

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.

The fee for each quarter shall be payable within ten (10) business days after
the end of the quarter.

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 4(c)

SUB-ADVISER AGREEMENT

SUB-ADVISER AGREEMENT executed as of April 16, 1998 between ALLMERICA FINANCIAL
INVESTMENT MANAGEMENT SERVICES, INC. (the "Manager"), and NICHOLAS-APPLEGATE
CAPITAL MANAGEMENT (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 each of the
following series of shares of the Trust: Select Aggressive Growth 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 each 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 each of the
Funds, as set forth in the current Registration Statement of the Trust filed
with the Securities and Exchange Commission 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
in writing. 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 Funds and to consult with the Manager regarding the investment affairs of
the Funds.

(b) The Sub-Adviser, at its expense, will furnish (i) all necessary investment
and management facilities, including salaries of personnel required for it to
execute its duties faithfully, and (ii) administrative facilities, including
clerical personnel and equipment necessary for the efficient conduct of the
investment affairs of each of the Funds (excluding pricing and bookkeeping
services).

(c) The Sub-Adviser shall place all orders for the purchase and sale of
portfolio investments for each 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 each 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
<PAGE>

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 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.

(d) The Sub-Adviser shall not be obligated to pay any expenses of or for a
Fund not expressly assumed by the Sub-Adviser pursuant to this Section 1.

2. OTHER AGREEMENTS, ETC.

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 and for the expenses borne by the Sub-Adviser pursuant to
Section 1, 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 through May 30, 1998, and shall continue in full force and
effect for successive periods of

2
<PAGE>

one year thereafter, but only so long as each such continuance is approved
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 Agreement as provided herein, the Sub-Adviser may
continue to serve hereunder 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 the Rules and Regulations thereunder, subject, however, to such exemptions
as may be granted by the Securities and Exchange Commission 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 and Exchange Act of 1934 and the Rules and Regulations thereunder.

7. NONLIABILITY OF SUB-ADVISER

In the absence of willful misfeasance, bad faith or gross negligence on the
part of the Sub-Adviser, or reckless disregard of its obligations and duties
hereunder, the Sub-Adviser shall not be subject to any liability to the Trust,
to any shareholder of the Trust or to the Manager, for any act or omission in
the course of, or connected with, rendering services hereunder.

3
<PAGE>

8. LIMITATIONS OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS

A copy of the Trust's 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 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.

9. MISCELLANEOUS

A. The Sub-Adviser shall be responsible for voting the securities of the
Funds.

B. Any notices from the Sub-Adviser to the Manager shall be mailed to the
following address:

Allmerica Financial Investment Management Services, Inc.
440 Lincoln Street
Worcester MA 01653
Attn: Counsel

Any notices from the Manager to the Sub-Adviser shall be mailed to the
following address:

Nicholas-Applegate Capital Management
501 West Broadway, Suite 2000
San Diego CA 92101
Attn: Antonio C. Cabral, Jr.
Vice President

C. It is understood that this Agreement shall be governed by and
construed under and in accordance with the laws of the Commonwealth of
Massachusetts laws except when Federal securities laws or other
Federal laws are applicable.

IN WITNESS WHEREOF, ALLMERICA FINANCIAL INVESTMENT MANAGEMENT

4
<PAGE>

SERVICES, INC. has caused this instrument to be signed in duplicate on its
behalf by its duly authorized representative and NICHOLAS-APPLEGATE CAPITAL
MANAGEMENT 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 FINANCIAL INVESTMENT
MANAGEMENT SERVICES, INC.

By: /s/ Richard M. Reilly
-------------------------------
Title: President
----------------------------

NICHOLAS-APPLEGATE CAPITAL MANAGEMENT

By: /s/ E. Blake Moore, Jr.
-------------------------------
Title: General Counsel
----------------------------

Accepted and Agreed to as of the day and year first above written:

ALLMERICA INVESTMENT TRUST

By: /s/ Thomas P. Cunningham
-------------------------------
Title: Vice President and Treasurer
-------------------------------

5
<PAGE>

SCHEDULE A
----------

The Manager will pay to the Sub-Adviser as compensation for the Sub-Adviser's
services rendered and for the expenses borne by the Sub-Adviser pursuant to
Section 1, a fee, computed daily at an annual rate based on the average daily
net assets of each Fund (valued in accordance with the current Registration
Statement of the Fund), as set forth below:
<TABLE>
<CAPTION>
Fund Net Assets Fee Rate
---- ---------- --------
<S> <C> <C>
Select Aggressive Growth Fund First $100 Million 0.60%
Next $150 Million 0.55%
Next $250 Million 0.50%
Over $500 Million 0.45%
</TABLE>

Such fee will be paid to the Sub-Adviser after the end of each calendar
quarter.

<PAGE>

EXHIBIT 4(d)
SUB-ADVISER AGREEMENT

SUB-ADVISER AGREEMENT executed as of April 16, 1998 between ALLMERICA FINANCIAL
INVESTMENT MANAGEMENT SERVICES, INC., a corporation organized and existing under
the laws of the Commonwealth of Massachusetts, (the "Manager") and T. ROWE PRICE
ASSOCIATES, INC. (the "Sub-Adviser"), a corporation organized and existing under
the laws of the state of Maryland.

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 Select Capital Appreciation Fund (the
"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 Fund 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 Fund, 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 by notice in writing 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 Fund. 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, at its expense, will furnish (i) all
investment and management facilities, including salaries of
personnel necessary for it to perform the duties set forth in
this Agreement, and (ii) administrative facilities, including
clerical personnel and equipment necessary for the conduct of
the investment affairs of the Fund (excluding brokerage
expenses and pricing and bookkeeping services).

(c) 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-
<PAGE>

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 require, and
consistent with the requirements of Section 28(e) of the
Securities and Exchange Act of 1934, as amended, 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 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

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.

2
<PAGE>

4. MATERIAL TO BE FURNISHED TO SUB-ADVISER

During the term of this Agreement, the Manager shall furnish
the Sub-Adviser with any further documents, materials or information that the
Sub-Adviser may reasonably request to enable it to perform its duties pursuant
to this Agreement. The Manager shall furnish to the Sub-Adviser at its principal
office all prospectuses, proxy statements, reports to shareholders, advertising
and sales literature, or other material prepared for distribution to
shareholders of the Fund or the public, which refer to the Sub-Adviser or its
clients in any way, prior to the use thereof, and the Manager shall not use any
such material if the Sub-Adviser reasonably objects in writing seven business
days (or such other time as may be mutually agreed) after receipt thereof. The
Manager shall take reasonable steps to see that material prepared by employees
or agents of the Manager or its affiliates that refer to the Sub-Adviser or its
clients in any way are consistent with those materials previously approved by
the Sub-Adviser as referenced in the preceding sentence.

5. AMENDMENTS OF THIS AGREEMENT

This Agreement (including Schedule A attached 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, if such approval is required under the
Investment Company Act of 1940, as amended ("1940 Act"), 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 in
persons of the Trust or of the Manager or of the Sub-Adviser.

6. 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 or pursuant to any
applicable requirements of the 1940 Act or regulations
promulgated thereunder, this Agreement shall remain in full
force and effect through April 1, 2000 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 the 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 the Fund for
their approval and such shareholders fail to approve such
continuance of this Agreement as provided herein, the Sub-
Adviser may continue to serve hereunder in a manner consistent
with the 1940 Act and the rules and regulations thereunder.

3
<PAGE>

(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, in each
case 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 with the Manager shall
have terminated for any reason.

(d) In the event of termination of this Agreement, the Fund will
no longer use the name "T. Rowe Price" or "T. Rowe Price
Associates, Inc." in materials relating to the Fund except as
may be required by the 1940 Act and the rules and regulations
thereunder.

7. CERTAIN DEFINITIONS

For the purpose 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 the Fund present (in person or by proxy) and entitled to the 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.

8. NON-LIABILITY 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 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.

4
<PAGE>

9. LIMITATIONS OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS

A copy of the Trust's 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 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 Financial Investment Management Services, Inc. has
caused this instrument to be signed in duplicate on its behalf by its duly
authorized representative and T. Rowe Price Associates, 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 FINANCIAL INVESTMENT
MANAGEMENT SERVICES, INC.

By: /s/ Richard M. Reilly
-----------------------------------------

Title: President
-----------------------------------------

T. ROWE PRICE ASSOCIATES, INC.

By: /s/ Darrell Braman
-----------------------------------------

Title: Vice President
-----------------------------------------

Accepted and Agreed to as of the day and year first above written:

ALLMERICA INVESTMENT TRUST

By: /s/ Thomas P. Cunningham
-----------------------------------------

Title: Vice President and Treasurer
-----------------------------------------

5
<PAGE>

SCHEDULE A
----------

The Manager will pay to the Sub-Adviser as full compensation for the
Sub-Adviser's services rendered, a fee computed daily and paid quarterly at an
annual rate based on the average daily net assets of the Fund as described
below:

FUND FEE RATE

Select Capital Appreciation Fund 0.50%

The average daily net assets of the Fund shall be determined by taking
an average of all of the determinations of net assets during each month at the
close of business on each business day during such month while this Agreement is
in effect.

The fee for each quarter shall be payable within ten (10) business days
after the end of the quarter.

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 4(e)

SUB-ADVISER AGREEMENT

SUB-ADVISER AGREEMENT executed as of April 16, 1998 between ALLMERICA
FINANCIAL INVESTMENT MANAGEMENT SERVICES, INC. (the "Manager") and CRAMER
ROSENTHAL MCGLYNN, LLC (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 SELECT VALUE OPPORTUNITY FUND (the "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 Fund, 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, at its expense, will furnish (i) all investment and
management facilities, including salaries of personnel necessary to perform for
it the duties set forth in this Agreement, and (ii) administrative facilities,
including clerical personnel and equipment necessary for the conduct of the
investment affairs of the Fund (excluding brokerage expenses and pricing and
bookkeeping services).

(c) 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

<PAGE>

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 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

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 attached 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, if such
approval is required under the Investment Company Act of 1940, as amended ("1940
Act"), 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:

2
<PAGE>

(a) Unless terminated as herein provided, this Agreement shall remain in
full force and effect through January 2, 2000, 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
the 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 the Fund for their approval and such shareholders fail to
approve such continuance of this Agreement as provided herein, the Sub-Adviser
may continue to serve hereunder in a manner consistent with the 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, in each case
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 with the Manager shall have terminated for any reason.

(d) In the event of termination of this agreement, the Fund will no longer
use the name "Cramer Rosenthal McGlynn, Inc." or "Cramer Rosenthal McGlynn, LLC"
in materials relating to the Fund except as may be required by the 1940 Act and
the rules and regulations thereunder.

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.

3
<PAGE>

7. NON-LIABILITY 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 Trust's 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 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.

4
<PAGE>

IN WITNESS WHEREOF, ALLMERICA FINANCIAL INVESTMENT MANAGEMENT SERVICES, INC. has
caused this instrument to be signed in duplicate on its behalf by its duly
authorized representative and CRAMER ROSENTHAL MCGLYNN, LLC 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 FINANCIAL INVESTMENT
MANAGEMENT SERVICES, INC.

By: /s/ Richard M. Reilly
-----------------------------------

Title: President
-------------------------------

CRAMER ROSENTHAL MCGLYNN, LLC

By: /s/ Ronald H. McGlynn
---------------------------------

Title: President
--------------------------------

Accepted and Agreed to as of the day and year first above written:

ALLMERICA INVESTMENT TRUST

By: /s/ Thomas P. Cunningham
-----------------------------------

Title: Vice President and Treasurer
-------------------------------

5
<PAGE>

SCHEDULE A
----------

NET ASSETS FEE RATE
---------- --------

First $100 million 0.60%
Next $150 million 0.50%
Next $250 million 0.40%
Next $250 million 0.375%
Over $750 million 0.35%

The fee for each quarter shall be payable within ten (10) business days after
the end of the quarter.

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 4(f)

SUB-ADVISER AGREEMENT

SUB-ADVISER AGREEMENT executed as of April 16, 1998 between ALLMERICA
FINANCIAL INVESTMENT MANAGEMENT SERVICES, INC., 440 Lincoln Street, Worcester
Massachusetts 01653 (the "Manager") and BANK OF IRELAND ASSET MANAGEMENT
LIMITED, with a principal place of business at 26 Fitzwilliam Place, Dublin 2,
Ireland, (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: SELECT INTERNATIONAL EQUITY FUND and such other
series of shares as the Trust, the Manager and the Sub-Adviser may from time to
time agree on (the "Fund"). The Sub-Adviser will make investment decisions on
behalf of the Fund 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. 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 Fund. 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, at its expense, will furnish (i) all necessary
investment and management facilities, including salaries of personnel required
for it to execute its duties faithfully, and (ii) administrative facilities,
including clerical personnel and equipment necessary for the efficient conduct
of the investment affairs of the fund (excluding pricing and bookkeeping
services).

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 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 the Sub-Adviser or any affiliate of the Sub-Adviser
exercises investment discretion.

2. OTHER AGREEMENTS

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

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 through May 30, 1998, and shall continue in full force and
effect for successive periods of

2
<PAGE>

one year thereafter, but only so long as each 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
Agreement as provided herein, the Sub-Adviser may continue to serve hereunder 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, 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 the 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 and 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,

3
<PAGE>

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 Trust's 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 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 Fund.

4
<PAGE>

IN WITNESS WHEREOF, ALLMERICA FINANCIAL INVESTMENT MANAGEMENT SERVICES, INC. has
caused this instrument to be signed in duplicate on its behalf by its duly
authorized representative and BANK OF IRELAND ASSET MANAGEMENT LIMITED 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 FINANCIAL INVESTMENT
MANAGEMENT SERVICES, INC.

By: /s/ Richard M. Reilly
------------------------------

Title: President
---------------------------

BANK OF IRELAND ASSET MANAGEMENT
LIMITED

By: /s/ Paul O'Shea /s/ Sean O'Dwyer
------------------------------------

Title: Manager Compliance Officer
----------------------------------

Accepted and Agreed to as of the day and year first above written:

ALLMERICA INVESTMENT TRUST

By: /s/ Thomas P. Cunningham
----------------------------

Title: Vice President and Treasurer
-------------------------------

5
<PAGE>

SCHEDULE A
-----------

The Manager will pay to the Sub-Adviser as full compensation for the Sub-
Adviser's services rendered, a fee, computed monthly and paid quarterly based on
the average daily net assets of the Fund as set forth below:

Assets Rate
------ ----

First $50 Million 0.45%
Next $50 Million 0.40%
Over $100 Million 0.30%

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 each business day during such month while this Agreement is in
effect.

The fee for each quarter shall be payable within ten (10) business days after
the end of the quarter. 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>

EXHBIT 4(g)
SUB-ADVISER AGREEMENT

SUB-ADVISER AGREEMENT executed as of April 16, 1998 between ALLMERICA FINANCIAL
INVESTMENT MANAGEMENT SERVICES, INC. (the "Manager"), and PUTNAM INVESTMENT
MANAGEMENT, 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 will
furnish continuously an investment program for the following series of shares of
the Trust: SELECT GROWTH 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 each 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 objective and policies of each of the Funds, as set forth in the current
Registration Statement of the Trust filed with the Securities and Exchange
Commission ("SEC"), as from time to time amended, as long as notice of such
amendments is delivered to the Sub-Adviser, 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
by written notice to the Sub-Adviser. The Sub-Adviser shall make its officers
and employees involved in portfolio management of the Funds available to the
Manager from time to time at reasonable times to review investment policies of
the Funds 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, at its expense, will furnish (i) all necessary
investment management facilities, including salaries of personnel required for
it to execute its duties faithfully, and (ii) administrative facilities directly
related to investment management, including clerical personnel and equipment
necessary for conduct of the investment affairs of each of the Funds. Except as
set forth in the immediately preceding sentence, the Sub-Adviser shall have no
responsibility for administration of the Funds, including but not limited to
pricing and bookkeeping services.

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
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 the Sub-Adviser or any affiliate of the Sub-Adviser exercises
investment discretion.

(d) The Sub-Adviser shall not be obligated to pay any expenses of or for a
Fund not expressly assumed by the Sub-Adviser pursuant to this Section 1.

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. The Manager understands that the
Sub-Adviser and its affiliates now act, will continue to act and may act in the
future as investment manager or advisers to fiduciary and other managed
accounts, and as investment manager or adviser to other investment companies,
including offshore entities or accounts, and the Manager has no objection to the
Sub-Adviser's so acting, provided that whenever a Fund and one or more other
investment companies or accounts managed or advised by the Sub-Adviser or
affiliates have available funds for investment, investments suitable and
appropriate for each will be allocated in accordance with a formula believed to
be equitable to each company and account. The terms and provisions of such
formula shall be communicated in writing to the Trust. The Manager recognizes
that in some cases this procedure may adversely affect the size of the position
obtainable for a Fund. In addition, the Manager understands that the persons
employed by the Sub-Adviser to assist in the performance of the Sub-Adviser's
duties under this Agreement will not devote their full time to such service and
nothing contained in this Agreement shall be deemed to limit or restrict the
right of the Sub-Adviser or any affiliate of the Sub-Adviser to engage in and
devote time and attention to other businesses.

3. COMPENSATION TO BE PAID BY THE MANAGER TO THE SUB-ADVISER

2
<PAGE>

4. AMENDMENTS OF THIS AGREEMENT

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 through May 30, 1998, and shall continue in full force and
effect for successive periods of one year thereafter, but only so long as each
such continuance is specifically approved annually (i) by the Trustees or by the
affirmative vote of a majority of the outstanding voting securities of the 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 Agreement as provided herein, the Sub-Adviser may continue to serve
hereunder in a manner consistent with the 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, in each case
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 between the Manager and the Trust dated July 1, 1992 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 the rules and

3
<PAGE>

regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission 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 and Exchange
Act of 1934 and the rules and regulations thereunder.

7. NONLIABILITY OF SUB-ADVISER

In the absence of willful misfeasance, bad faith or gross negligence on the
part of the Sub-Adviser, or reckless disregard of its obligations and duties
hereunder, the Sub-Adviser shall not be subject to any liability to the Trust,
to any shareholder of the Trust, or to the Manager, for any act or omission in
the course of, or connected with, rendering services hereunder.

8. LIMITATIONS OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS

A copy of the Trust's 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 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.

4
<PAGE>

IN WITNESS WHEREOF, ALLMERICA FINANCIAL INVESTMENT MANAGEMENT SERVICES, INC. has
caused this instrument to be signed in duplicate on its behalf by its duly
authorized representative and PUTNAM INVESTMENT MANAGEMENT, 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 FINANCIAL INVESTMENT
MANAGEMENT SERVICES, INC.

By: /s/ Richard M. Reilly
---------------------------------------

Title: President
-------------------------------------

PUTNAM INVESTMENT MANAGEMENT, INC.

By: /s/ John R. Verani
---------------------------------------

Title: Senior Vice President
------------------------------------

Accepted and Agreed to as of the day and year first above written:

ALLMERICA INVESTMENT TRUST

By: /s/ Thomas P. Cunningham
-----------------------------------

Title: Vice President and Treasurer
--------------------------------

5
<PAGE>

SCHEDULE A
----------

The Manager will pay to the Sub-Adviser as compensation for the Sub-Adviser's
services rendered and for the expenses borne by the Sub-Adviser pursuant to
Section l, a fee, computed daily at an annual rate based on the average daily
net assets of each Fund under the following fee schedule. Such fee will be paid
to the Sub-Adviser after the end of each calendar quarter.

Assets Rate
------ ----

First $50 Million 0.50%
Next $100 Million 0.45%
Next $100 Million 0.35%
Next $100 Million 0.30%
Over $350 Million 0.25%

<PAGE>

EXHIBIT 4(h)

SUB-ADVISER AGREEMENT

SUB-ADVISER AGREEMENT executed as of April 16, 1998 between ALLMERICA FINANCIAL
INVESTMENT MANAGEMENT SERVICES, INC. (the "Manager") and CAMBIAR INVESTORS, 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 SELECT STRATEGIC GROWTH
FUND (the "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
Fund, 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 Fund. 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.

<PAGE>

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 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

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 attached 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, if such approval is required under the Investment Company Act of 1940,
as amended ("1940 Act"), 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.

2
<PAGE>

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:

(d) In the event of termination of this Agreement, the Fund will no longer
use the name "Cambiar Investors, Inc." in materials relating to the
Fund except as may be required by the 1940 Act and the rules and
regulations thereunder.

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 the 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.

3
<PAGE>

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. NON-LIABILITY 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 Trust's 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 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.

4
<PAGE>

IN WITNESS WHEREOF, ALLMERICA FINANCIAL INVESTMENT MANAGEMENT SERVICES, INC. has
caused this instrument to be signed in duplicate on its behalf by its duly
authorized representative and CAMBIAR INVESTORS, 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 FINANCIAL INVESTMENT
MANAGEMENT SERVICES, INC.

By: /s/ Richard M. Reilly
-----------------------------

Title: President
-----------------------------

CAMBIAR INVESTORS, INC.

By: /s/ Michael S. Barish
-----------------------------

Title: President
-----------------------------

Accepted and Agreed to as of the day and year first above written:

ALLMERICA INVESTMENT TRUST

By: /s/ Thomas P. Cunningham
-----------------------------

Title: Vice President and Treasurer
-----------------------------

5
<PAGE>

SCHEDULE A
----------

NET ASSETS FEE RATE
---------- --------
First $50 Million 0.50%
Next $100 Million 0.45%
Next $100 Million 0.35%
Next $100 Million 0.30%
Over $350 Million 0.25%

The fee for each quarter shall be payable within ten (10) business days after
the end of the quarter.

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>

SUB-ADVISER AGREEMENT EXHIBIT 4(i)

SUB-ADVISER AGREEMENT executed as of April 16, 1998 between ALLMERICA
FINANCIAL INVESTMENT MANAGEMENT SERVICES, INC. (the "Manager"), and MILLER,
ANDERSON & SHERRERD, LLP (or any successor-in-interest (by merger or otherwise)
thereto or transferee thereof that does not involve an "assignment" within the
meaning of the Investment Company Act of 1940 and that is a limited liability
partnership or other entity wholly-owned, directly or indirectly, by Morgan
Stanley Asset Management Holdings, Inc. and/or its affiliates; Miller Anderson &
Sherrerd, LLP or such successor-in-interest or transferee being referred to
herein as 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 each of the
following series of shares of the Trust: the Growth 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 each 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 each of the
Funds, as set forth in the current Registration Statement of the Trust filed
with the Securities and Exchange Commission 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
in writing. 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 Funds and to consult with the Manager regarding the investment affairs of
the Funds.

(b) The Sub-Adviser, at its expense, will furnish (i) all necessary
investment and management facilities, including salaries of personnel required
for it to execute its duties faithfully, and (ii) administrative facilities,
including clerical personnel and equipment necessary for the efficient conduct
of the investment affairs of each of the Funds (excluding pricing and
bookkeeping services).

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
greater than that which 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 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 the Sub-Adviser or any affiliate of the
Sub-Adviser exercises investment discretion.

(d) The Sub-Adviser shall not be obligated to pay any expenses of or for a
Fund not expressly assumed by the Sub-Adviser pursuant to this Section 1.

2. OTHER AGREEMENTS, ETC.

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 and for the expenses borne by the Sub-Adviser
pursuant to Section 1, 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

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.

2
<PAGE>

A. Unless terminated as herein provided, this Agreement shall remain in
full force and effect through May 30, 1998, and shall continue in full
force and effect for successive periods of one year thereafter, but
only so long as each such continuance is approved 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 Agreement as provided herein, the Sub-Adviser may
continue to serve hereunder 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 the Rules and Regulations thereunder, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission 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 and Exchange Act of 1934 and the Rules and
Regulations thereunder.

3
<PAGE>

7. NONLIABILITY OF SUB-ADVISER

In the absence of willful misfeasance, bad faith or gross negligence on the
part of the Sub-Adviser, or reckless disregard of its obligations and duties
hereunder, the Sub-Adviser shall not be subject to any liability to the Trust,
or to any shareholder of the Trust, for any act or omission in the course of, or
connected with, rendering services hereunder.

8. LIMITATIONS OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS

A copy of the Trust's 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 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.

9. MISCELLANEOUS

Each party hereto shall cooperate with each other party and all appropriate
governmental authorities (including without limitation the Securities and
Exchange Commission, the NASD and State insurance regulators) and shall permit
such authorities reasonable access to its books and records in connection with
any investigation or inquiry relating to this Agreement or the transactions
contemplated hereby.

Notwithstanding the generality of the foregoing, each party hereto further
agrees to provide the California Insurance Commissioner, or the Insurance
Commissioner of any other state, with any information or reports in connection
with services provided under this Agreement which such Commissioner may
reasonably request in order to ascertain whether the variable contracts
operations of the Company are being conducted in a manner consistent with the
state's regulations concerning variable contracts and any other applicable law
or regulations.

4
<PAGE>

IN WITNESS WHEREOF, ALLMERICA FINANCIAL INVESTMENT MANAGEMENT SERVICES, INC. has
caused this instrument to be signed in duplicate on its behalf by its duly
authorized representative and MILLER, ANDERSON & SHERRERD, LLP 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 FINANCIAL INVESTMENT
MANAGEMENT SERVICES, INC.

By: /s/ Richard M. Reilly
-------------------------------
Title: President
----------------------------

MILLER, ANDERSON & SHERRERD, LLP

By: /s/ Nicholas J. Kovich
-------------------------------
Title: Managing Director
----------------------------

Accepted and Agreed to as of the day and year first above written:

ALLMERICA INVESTMENT TRUST

By: /s/ Thomas P. Cunningham
-------------------------------------

Title: Vice President and Treasurer
----------------------------------

5
<PAGE>

SCHEDULE A
----------

Annexed to Agreements by and between Miller, Anderson & Sherrerd, LLP (the
"Adviser") and the Affiliated Clients.

1. The Affiliated Clients shall mean, as used in Schedule A, The Hanover
Insurance Company, Citizens Insurance Company of America, First Allmerica
Financial Life Insurance Company and Allmerica Financial Investment
Management Services, Inc. (as Manager) with respect to Allmerica Investment
Trust, which companies have each entered into a separate advisory Agreement
with the Adviser.

2. For purposes of calculating fees earned by the Adviser, and at the times of
such calculation, the assets in the Affiliated Clients' separate accounts
managed by the Adviser shall be valued at market value and, taken
collectively, are referred to hereinafter as the Aggregate Account.

3. Adviser shall be entitled to receive annual fees on the Aggregate Account as
follows:

ANNUAL FEES
-----------

.500% per annum on first $50 million of the Aggregate Account

.375% per annum on next $50 million of the Aggregate Account

.250% per annum on next $400 million of the Aggregate Account

.200% per annum on next $250 million of the Aggregate Account

.150% per annum on amount over $850 million of the Aggregate Account

4. The fee shall be paid quarterly in arrears at the end of each calendar
quarter for services rendered during such quarter based on the average value
of the assets of the Funds of Allmerica Investment Trust during the quarter
and the market value of assets of The Hanover Insurance Company, Citizens
Insurance Company of America, and First Allmerica Financial Life Insurance
Company as of the beginning of such quarter. The first billing for the
accounts of The Hanover Insurance Company, Citizens Insurance Company of
America, and First Allmerica Financial Life Insurance Company will be
calculated on the market value of the assets at the close of business on the
business day prior to the effective date of management. Should the time span
be less than a calendar quarter for any Affiliated Client, the fee will be
prorated based on actual days.

5. The quarterly fee for the Aggregate Account, as calculated, will be prorated
among the Affiliated Clients based on their proportionate shares of the
Aggregate Account and billed to the Affiliated Clients; payments are due
within twenty (20) days of receipt of bills. Billings should be directed by
the Adviser to the Client's representative.

<PAGE>

EXHIBIT 4(j)

FORM OF
SUB-ADVISER AGREEMENT

SUB-ADVISER AGREEMENT executed as of ____________, 1999 between ALLMERICA
FINANCIAL INVESTMENT MANAGEMENT SERVICES, INC. (the "Manager"), and J.P.
Morgan Investment Management 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: SELECT GROWTH AND INCOME FUND and such other
series of shares as the Trust, the Manager and the Sub-Adviser may from time to
time agree on (the "Fund"). The Sub-Adviser will make investment decisions on
behalf of the Fund 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 objective and policies of the Fund, 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. 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 Fund. 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, at its expense, will furnish (i) all necessary
investment and management facilities, including salaries of personnel required
for it to execute its duties faithfully, and (ii) administrative facilities,
including clerical personnel and equipment necessary for the efficient conduct
of the investment affairs of the Fund (excluding pricing and bookkeeping
services).

(c) The Sub-Adviser shall place all orders for the purchase and sale of
portfolio investment 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
<PAGE>

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 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 the Sub-Adviser or any affiliate of the Sub-Adviser
exercises investment discretion.

2. OTHER AGREEMENTS

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

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 the Fund continuously thereafter, until
terminated as provided below.

(a) Unless terminated as herein provided, this Agreement shall remain in full
force and effect through May 30, 1998, and shall continue in full force and
effect for successive periods of one year thereafter, but only so long as each
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
the Fund, and (ii) by a vote of 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

2
<PAGE>

shareholders fail to approve such continuance of this Agreement as provided
herein, the Sub-Adviser may continue to serve hereunder 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 the Fund without the payment of
any penalty by the Manager, by vote of the Trustees, or by vote of a majority of
the outstanding voting securities of the Fund at any annual or special meeting
or by the Sub-Adviser on sixty days' written notice.

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 the 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 the Rules and Regulations thereunder, subject, however, to such exemptions
as may be granted by the Securities and Exchange Commission 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 and Exchange Act of 1934 and the rules and regulations thereunder.

7. NONLIABILITY OF SUB-ADVISER

In the absence of willful misfeasance, bad faith or gross negligence on the
part of the Sub-Adviser, or reckless disregard of its obligations and duties
hereunder, the Sub-Adviser shall not be subject to any liability to the Trust or
Fund, or to any shareholder of the Fund, for any act or omission in the course
of, or connected with, rendering services hereunder.

8. LIMITATIONS OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS

A copy of the Trust's 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 Trustees as Trustees and not individually and
that the obligations of this instrument are binding only upon the assets and
property of the Fund.

3
<PAGE>

IN WITNESS WHEREOF, ALLMERICA FINANCIAL INVESTMENT MANAGEMENT SERVICES, INC. has
caused this instrument to be signed in duplicate on its behalf by its duly
authorized representative and J.P. MORGAN INVESTMENT MANAGEMENT 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 FINANCIAL INVESTMENT
MANAGEMENT SERVICES, INC.

By:
----------------------------

Its:
----------------------------

J.P. MORGAN INVESTMENT MANAGEMENT
INC.

By:
----------------------------

Its:
----------------------------

Accepted and Agreed to as of the day and year first above written:

ALLMERICA INVESTMENT TRUST

By:
---------------------------

Its:
---------------------------

4
<PAGE>

SCHEDULE A
----------

The Manager will pay to the Sub-Adviser, as full compensation for the Sub-
Adviser's services rendered, a quarterly fee, computed at an annual rate
based on the average daily net assets of the Fund, as set forth below:

<TABLE>
<CAPTION>
Assets Rate
------ ----
<S> <C>
First $500 Million 0.30%
Next $500 Million 0.25%
Over $1 Billion 0.20%
</TABLE>

<PAGE>

EXHIBIT 4(k)

SUB-ADVISER AGREEMENT

SUB-ADVISER AGREEMENT executed as of April 16, 1998 between ALLMERICA FINANCIAL
INVESTMENT MANAGEMENT SERVICES, INC. (the "Manager"), and STANDISH, AYER & WOOD,
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 each of the
following series of shares of the Trust: Select Income 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 each 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 each of the
Funds, as set forth in the current Registration Statement of the Trust filed
with the Securities and Exchange Commission 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
in writing. 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 Funds and to consult with the Manager regarding the investment affairs of
the Funds.

(b) The Sub-Adviser, at its expense, will furnish (i) all necessary
investment and management facilities, including salaries of personnel required
for it to execute its duties faithfully, and (ii) administrative facilities,
including clerical personnel and equipment necessary for the efficient conduct
of the investment affairs of each of the Funds (excluding pricing and
bookkeeping services).

<PAGE>

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 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.

(d) The Sub-Adviser shall not be obligated to pay any expenses of or for a
Fund not expressly assumed by the Sub-Adviser pursuant to this Section 1.

2. OTHER AGREEMENTS, ETC.

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 and for the expenses borne by the Sub-Adviser
pursuant to Section 1, 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 TO THIS AGREEMENT

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.

2
<PAGE>

is approved 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 Agreement as
provided herein, the Sub-Adviser may continue to serve hereunder 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
Investment Company Act of 1940 and the Rules and Regulations thereunder,
subject, however, to such exemptions as may be granted by the Securities and
Exchange Commission under said Act; the term "specifically approve at least
annually" shall be construed in a manner consistent with the Investment Company
Act of 1940 and the Rules and Regulations thereunder; and the term "brokerage
and research services" shall have the meaning given in the Securities and
Exchange Act of 1934 and the Rules and Regulations thereunder.

7. NONLIABILITY OF SUB-ADVISER

3
<PAGE>

8. LIMITATIONS OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS

A copy of the Trust's 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 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.

4
<PAGE>

IN WITNESS WHEREOF, ALLMERICA FINANCIAL INVESTMENT MANAGEMENT SERVICES, INC.
has caused this instrument to be signed in duplicate on its behalf by its duly
authorized representative and STANDISH, AYER & WOOD, 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 FINANCIAL INVESTMENT
MANAGEMENT SERVICES, INC.

By: /s/ Richard M. Reilly
---------------------------------
Title: President
---------------------------------

STANDISH, AYER & WOOD, INC.

By: /s/ Austin C. Smith
---------------------------------
Title: Treasurer
---------------------------------

Accepted and Agreed to as of the day and year first above written:

ALLMERICA INVESTMENT TRUST

By: /s/ Thomas P. Cunningham
-------------------------------
Title: Vice President and Treasurer
-------------------------------

5
<PAGE>

SCHEDULE A
----------

<PAGE>

EXHIBIT 4(l)

SUB-ADVISER AGREEMENT

SUB-ADVISER AGREEMENT executed as of April 16, 1998 between ALLMERICA FINANCIAL
INVESTMENT MANAGEMENT SERVICES, INC. (the "Manager"), and ALLMERICA ASSET
MANAGEMENT, INC. ("AAM").

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 each of the
following series of shares of the Trust: the Investment Grade Income Fund, the
Money Market Fund, the Equity Index Fund, the Government Bond 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 each 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 each of the
Funds, as set forth in the current Registration Statement of the Trust filed
with the Securities and Exchange Commission and any applicable federal and state
laws, and to 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.
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 Funds
and to consult with the Manager regarding the investment affairs of the Funds.

(b) The Sub-Adviser, at its expense, will furnish (i) all necessary
investment and management facilities, including salaries of personnel required
for it to execute its duties faithfully, and (ii) administrative facilities,
including clerical personnel and equipment necessary for the efficient conduct
of the investment affairs of each of the Funds (excluding pricing and
bookkeeping services).

(c) The Sub-Adviser shall place all orders for the purchase and sale of
portfolio investments for each Fund with issuers, brokers or dealers selected by
the Sub-Adviser which may include brokers and 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 each 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

<PAGE>

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 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.

(d) The Sub-Adviser shall not be obligated to pay any expenses of or for a
Fund not expressly assumed by the Sub-Adviser pursuant to this Section 1.

2. OTHER AGREEMENTS, ETC.

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 and for the expenses borne by the Sub-Adviser
pursuant to Section 1, 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

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 through May 30, 1998, and shall continue in full
force and effect for

2
<PAGE>

successive periods of one year thereafter, but only so long as each
such continuance is approved (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 Agreement as
provided herein, the Sub-Adviser may continue to serve hereunder 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 Investment Company Act of 1940 and the Rules and Regulations
thereunder, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under said Act; the term "specifically
approve at least annually" shall be construed in a manner consistent with
the Investment Company Act of 1940 and the Rules and Regulations
thereunder; and the term "brokerage and research services" shall have the
meaning given in the Securities and Exchange Act of 1934 and the Rules and
Regulations thereunder.

7. NONLIABILITY OF SUB-ADVISER

In the absence of willful misfeasance, bad faith or gross negligence
on the part of the Sub-Adviser, or reckless disregard of its obligations
and duties hereunder, the Sub-

3
<PAGE>

Adviser shall not be subject to any liability to the Trust, or to any
shareholder of the Trust, for any act or omission in the course of, or
connected with, rendering services hereunder.

8. LIMITATIONS OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.

A copy of the Trust's 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 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.

9. MISCELLANEOUS

Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the
Securities and Exchange Commission, the NASD and State insurance
regulators) and shall permit such authorities reasonable access to its
books and records in connection with any investigation or inquiry relating
to this Agreement or the transactions contemplated hereby.

Notwithstanding the generality of the foregoing, each party hereto
further agrees to furnish the California Insurance Commissioner, or the
Insurance Commissioner of any other state, with any information or reports
in connection with services provided under this Agreement which such
Commissioner may reasonably request in order to ascertain whether the
variable contracts operations of the Company are being conducted in a
manner consistent with the state's regulations concerning variable
contracts and any other applicable law or regulations.

4
<PAGE>

IN WITNESS WHEREOF, ALLMERICA FINANCIAL INVESTMENT MANAGEMENT SERVICES, INC. has
caused this instrument to be signed in duplicate on its behalf by its duly
authorized representative and ALLMERICA ASSET MANAGEMENT, INC. ("AAM") has
caused this instrument to be signed in duplicate on its behalf by its duly
authorized representative, all as of this day and year first above written.

ALLMERICA FINANCIAL INVESTMENT
MANAGEMENT SERVICES, INC.

By: /s/ Richard M. Reilly
---------------------------------
Title: President
---------------------------------

ALLMERICA ASSET MANAGEMENT, INC.

By: /s/ Ann K. Tripp
---------------------------------
Title: Vice President
---------------------------------

Accepted and Agreed to as of the day and year first above written:

ALLMERICA INVESTMENT TRUST

By: /s/ Thomas P. Cunningham
---------------------------------
Title: Vice President and Treasurer
---------------------------------

5
<PAGE>

SCHEDULE A
----------

ANNUAL FEES
-----------

Equity Index Fund: .10% of the average daily net assets

Investment Grade Income Fund: .20% of the average daily net assets

Government Bond Fund: .20% of the average daily net assets

Money Market Fund: .10% of the average daily net assets

<PAGE>

EXHIBIT 9

February 25, 1999

Allmerica Investment Trust
440 Lincoln Street
Worcester, MA 01653

Ladies and Gentlemen:

In my capacity as Secretary of and Counsel to Allmerica Investment Trust (the
"Trust"), I have participated in the preparation of Amendment No. 38 to its
Registration Statement on Form N-1A under the Investment Company Act of 1940 and
Post-effective Amendment No. 37 under the Securities Act of 1933 with respect to
the issuance of its shares. I am of the opinion that, when sold in accordance
with the terms of the Prospectuses and Statement of Additional Information in
effect at the time of sale, the shares of each Fund of the Trust will be legally
issued, fully paid and non-assessable by the Trust.

In arriving at the foregoing opinion, I have made such examination of law and
examined such records and other documents as in my judgment are necessary or
appropriate. I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form N-1A.

Sincerely,

/s/ George M. Boyd

George M. Boyd
Secretary and Counsel

<PAGE>

EXHIBIT 12

PARTICIPATION AGREEMENT

AMONG

ALLMERICA INVESTMENT TRUST

ALLMERICA FINANCIAL INVESTMENT MANAGEMENT SERVICES, INC.

AND

FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY

DATED

FEBRUARY 16, 1999
<PAGE>

TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I. Purchase of Fund Shares 4

ARTICLE II Representations and Warranties 5

ARTICLE III Prospectuses, Reports to Shareholders
and Proxy Statements, Voting 6

ARTICLE IV Sales Material and Information 8

ARTICLE V Fees and Expenses 9

ARTICLE VI Diversification 9

ARTICLE VII Potential Conflicts 10

ARTICLE VIII Indemnification 11

ARTICLE IX. Applicable Law 15

ARTICLE X Termination 15

ARTICLE XI Notices 16

ARTICLE XII Miscellaneous 17

SCHEDULE A Separate Accounts and Variable Products A-1

SCHEDULE B Portfolios of Allmerica Investment Trust B-1

SCHEDULE C Proxy Voting Procedures C-1
</TABLE>

2
<PAGE>

THIS AGREEMENT, made and entered into as of the 16th day of February, 1999 by
and among: FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY (hereinafter the
"Company"), a Massachusetts corporation, on its own behalf and on behalf of each
separate account of the Company set forth on Schedule A hereto, as may be
amended from time to time (each such account hereinafter referred to as the
"Account"); ALLMERICA INVESTMENT TRUST, an unincorporated Massachusetts business
trust (hereinafter the "Fund"), and ALLMERICA FINANCIAL INVESTMENT MANAGEMENT
SERVICES, INC. (hereinafter the "Adviser"), a Massachusetts corporation

WHEREAS, the Fund engages in business as an open-end management investment
company and is available to act as (i) the investment vehicle for separate
accounts established by insurance companies for individual and group life
insurance policies and annuity contracts with variable accumulation and/or pay-
out provisions (hereinafter referred to individually and/or collectively as
"Variable Products") and (ii) the investment vehicle for certain qualified
pension and retirement plans (hereinafter "Qualified Plans"); and

WHEREAS, insurance companies desiring to utilize the Fund as an investment
vehicle under their Variable Products enter into participation agreements with
the Fund and the Adviser (the "Participating Insurance Companies");

WHEREAS, shares of the Fund are divided into several series of shares, each
representing the interest in a particular managed portfolio of securities and
other assets (each such series hereinafter referred to as a "Portfolio"), any
one or more of which may be made available under this Agreement, as may be
amended from time to time by mutual agreement of the parties hereto; and

WHEREAS, the Fund has applied for an order from the Securities and Exchange
Commission, granting Participating Insurance Companies and Variable Insurance
Product separate accounts exemptions from the provisions of Sections 9(a),
13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended
(hereinafter the "1940 Act"), and Rules 6e-2(b)(15) and 6e-3(T)(b)(15)
thereunder, to the extent necessary to permit shares of the Fund to be sold to
and held by separate accounts of both affiliated and unaffiliated life insurance
companies and Qualified Plans (hereinafter the "Shared Funding Exemptive
Order"); and

WHEREAS, the Fund is registered as an open-end management investment
company under the 1940 Act and its shares are registered under the Securities
Act of 1933, as amended (hereinafter the "1933 Act"); and

WHEREAS, the Adviser is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and any applicable state securities
laws and manages each of the certain portfolios of the Fund and retains Sub-
Advisers for the daily investment and reinvestment of the assets of each
portfolio; and

WHEREAS, Allmerica Investments, Inc. (the "Distributor") is registered as a
broker/dealer under the Securities Exchange Act of 1934, as amended (hereinafter
the "1934 Act"), is a member in good standing of the National Association of
Securities Dealers, Inc. (hereinafter "NASD"); and

WHEREAS, the Company has registered or will register certain Variable
Products under the 1933 Act; and

3
<PAGE>

WHEREAS, each Account is a duly organized, validly existing segregated
asset account, established by resolution or under authority of the Board of
Directors of the Company, to set aside and invest assets attributable to the
aforesaid Variable Products, and the Company has registered or will register
each Account as a unit investment trust under the 1940 Act; and

WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase, on behalf of each Account, shares
in the Portfolios set forth in Schedule B attached to this Agreement, to fund
certain of the aforesaid Variable Insurance Products and the Fund is authorized
to sell such shares to each such Account at net asset value;

NOW, THEREFORE, in consideration of their mutual promises, the parties
hereto agree as follows:

ARTICLE I. PURCHASE OF FUND SHARES

1.1. The Fund agrees to make available for purchase by the Company shares
of the Fund and shall execute orders placed for each Account on a daily basis at
the net asset value next computed after receipt by the Fund or its designee of
such order. For purposes of this Section 1.1, the Company shall be the designee
of the Fund for receipt of such orders from each Account and receipt by such
designee of an order prior to the close of regular trading on the New York Stock
Exchange ("NYSE") shall constitute receipt by the Fund; provided that the Fund
receives notice of such order by 10:00 a.m. Eastern time on the next following
Business Day. "Business Day" shall mean any day on which the New York Stock
Exchange is open for trading and on which the Fund calculates its net asset
value pursuant to the rules of the Securities and Exchange Commission.

1.2. The Fund, so long as this Agreement is in effect, agrees to make its
shares available indefinitely for purchase at the applicable net asset value per
share by the Company and its Accounts on those days on which the Fund calculates
its net asset value pursuant to rules of the Securities and Exchange Commission
and the Fund shall use reasonable efforts to calculate such net asset value on
each day which the New York Stock Exchange is open for trading. Notwithstanding
the foregoing, the Board of Trustees of the Fund (hereinafter the "Board") may
refuse to permit the Fund to sell shares of any Portfolio to any person, or
suspend or terminate the offering of shares of any Portfolio if such action is
required by law or by regulatory authorities having jurisdiction or is, in the
sole discretion of the Board acting in good faith and in light of their
fiduciary duties under federal and any applicable state laws, necessary in the
best interests of the shareholders of such Portfolio.

1.3. The Fund agrees that shares of the Fund will be sold only to
Participating Insurance Companies and their separate accounts and to certain
Qualified Plans. No shares of any Portfolio will be sold to the general public.

1.4. The Fund agrees to redeem for cash, on the Company's request, any
full or fractional shares of the Fund held by the Company, executing such
requests on a daily basis at the net asset value next computed after receipt by
the Fund or its designee of the request for redemption. For purposes of this
Section 1.4, the Company shall be the designee of the Fund for receipt of
requests for redemption from each Account and receipt by such designee of a
request prior to the close of regular trading on the NYSE shall constitute
receipt by the Fund, provided that the Fund receives notice of such request for
redemption on the next following Business Day.

1.5. The Company agrees that purchases and redemptions of Portfolio shares
offered by the then current prospectus of the Fund shall be made in accordance
with the provisions of such prospectus.

4
<PAGE>

1.6. The Company shall pay for Fund shares no later than the next Business
Day after an order to purchase Fund shares is made in accordance with the
provisions of Section 1.1 hereof. Payment shall be in federal funds transmitted
by wire.

1.7. Issuance and transfer of the Fund's shares will be by book entry
only. Stock certificates will not be issued to the Company or any Account.
Shares ordered from the Fund will be recorded in an appropriate title for each
Account or the appropriate subaccount of each Account.

1.8 The Fund shall furnish same day notice (by wire or telephone, followed
by written confirmation) to the Company of any income, dividends or capital gain
distributions payable on the Fund's shares. The Company hereby elects to
receive all such income dividends and capital gain distributions as are payable
on the Portfolio shares in additional shares of that Portfolio. The Company
reserves the right to revoke this election and to receive all such income
dividends and capital gain distributions in cash. The Fund shall notify the
Company of the number of shares so issued as payment of such dividends and
distributions.

1.9. The Fund shall make the net asset value per share for each Portfolio
available to the Company on a daily basis as soon as reasonably practical after
the net asset value per share is calculated (normally by 6:30 p.m. Eastern time)
and shall use its best efforts to make such net asset value per share available
by 7:00 p.m. Eastern time.

ARTICLE II. REPRESENTATIONS AND WARRANTIES

2.1. The Company represents and warrants that the Variable Products are or
will be registered under the 1933 Act; that the Variable Products will be issued
and sold in compliance in all material respects with all applicable federal and
state laws, and that the sale of the Variable Products shall comply in all
material respects with state insurance suitability requirements. The Company
further represents and warrants that it is an insurance company duly organized
and in good standing under applicable law, that it has legally and validly
established each Account as a segregated asset account under the Massachusetts
Insurance Code, and that it has registered or, prior to any issuance or sale of
the Variable Products, will register each Account as a unit investment trust in
accordance with the provisions of the 1940 Act to serve as a segregated
investment account for the Variable Products.

2.2. The Fund represents and warrants that Fund shares sold pursuant to
this Agreement shall be registered under the 1933 Act, duly authorized for
issuance and sold in compliance with the laws of the Commonwealth of
Massachusetts and all applicable federal and state securities laws, and that the
Fund is and shall make every effort to remain registered under the 1940 Act.
The Fund shall amend the registration statement for its shares under the 1933
Act and the 1940 Act from time to time as required in order to effect the
continuous offering of its shares. The Fund shall register and qualify the
shares for sale in accordance with the laws of the various states only if and to
the extent deemed advisable by the Fund.

2.3. The Fund represents that it is currently qualified as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"), and that it will make every effort to maintain such
qualification (under Subchapter M or any successor or similar provision) and
that it will notify the Company promptly upon having a reasonable basis for
believing that it has ceased to so qualify or that it might not so qualify in
the future.

2.4. The Company represents that the Variable Products are currently
treated as life insurance policies or annuity contracts under applicable
provisions of the Code, that it will make every effort to maintain such
treatment, and that it will notify the Fund immediately upon having a reasonable
basis for

5
<PAGE>

believing that the Variable Products have ceased to be so treated or that they
might not be so treated in the future.

2.5. The Fund represents that to the extent that it decides to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act, the Fund
undertakes to have its board of Trustees, a majority of whom are not interested
persons of the Fund, formulate and approve any plan under Rule 12b-1 to finance
distribution expenses.

2.6. The Fund makes no representation as to whether any aspect of its
operations (including, but not limited to, fees and expenses and investment
policies) complies with the insurance laws or regulations of the various states.

2.7. The Fund represents that it is lawfully organized and validly
existing under the laws of the Commonwealth of Massachusetts and that it does
and will comply in all material respects with the 1940 Act.

2.8. The Adviser represents and warrants that it is and shall remain duly
registered in all material respects under all applicable federal and state
securities laws and that it will perform its obligations for the Fund in
compliance in all material respects with the laws of its state of domicile and
any applicable state and federal securities laws.

2.9. The Fund represents and warrants that its Trustees, officers,
employees, and other individuals/entities dealing with the money and/or
securities of the Fund are and shall continue to be at all times covered by a
blanket fidelity bond or similar coverage for the benefit of the Fund in an
amount not less than the minimal coverage as required currently by Rule 17g-(1)
of the 1940 Act or related provisions as may be promulgated from time to time.
The aforesaid blanket fidelity bond shall include coverage for larceny and
embezzlement and shall be issued by a reputable bonding company.

2.10. The Company represents and warrants that all of its directors,
officers, e mployees, investment advisers, and other individuals/entities
dealing with the money and/or securities of the Fund are covered by a blanket
fidelity bond or similar coverage, in an amount not less $5 million. The
aforesaid, which includes coverage for larceny and embezzlement, shall be issued
by a reputable bonding company. The Company agrees to make all reasonable
efforts to see that this bond or another bond containing these provisions is
always in effect, and agrees to notify the Fund and the Distributor promptly in
writing in the event that such coverage no longer applies.

ARTICLE III. PROSPECTUSES, REPORTS TO SHAREHOLDERS AND PROXY STATEMENTS; VOTING

3.1. The Fund or its designee shall provide the Company with as many
printed copies of the Fund's current prospectus and statement of additional
information as the Company may reasonably request. If requested by the Company,
in lieu of providing printed copies, the Fund shall provide camera-ready film or
computer diskettes containing the Fund's prospectus and statement of additional
information, and such other assistance as is reasonably necessary in order for
the Company once each year (or more frequently if the prospectus and/or
statement of additional information for the Fund is amended during the year) to
have the prospectus for the Variable Products and the Fund's prospectus printed
together in one document, and to have the statement of additional information
for the Fund and the statement of additional information for the Variable
Products printed together in one document. Alternatively, the Company may print
the Fund's prospectus and/or its statement of additional information in
combination with other fund companies' prospectuses and statements of additional
information.

6
<PAGE>

3.2. Except as provided in this Section 3.2., all expenses of printing and
distributing Fund prospectuses and statements of additional information shall be
the expense of the Company. For any prospectuses and statements of additional
information provided by the Company to the existing owners of Variable Products
who currently own shares of one or more of the Fund's Portfolios, in order to
update disclosure as required by the 1933 Act and/or the 1940 Act, the cost of
printing shall be borne by the Fund. If the Company chooses to receive camera-
ready film or computer diskettes in lieu of receiving printed copies of the
Fund's prospectus, the Fund will reimburse the Company in an amount equal to the
product of x and y where x is the number of such prospectuses distributed to
owners of the Variable Products who currently own shares of one or more of the
Fund's Portfolios, and y is the Fund's per unit cost of typesetting and printing
the Fund's prospectus. The same procedures shall be followed with respect to
the Fund's statement of additional information. The Company agrees to provide
the Fund or its designee with such information as may be reasonably requested by
the Fund to assure that the Fund's expenses do not include the cost of printing
any prospectuses or statements of additional information other than those
actually distributed to existing owners of the Variable Products.

3.3. The Fund's statement of additional information shall be obtainable
from the Fund, the Company or such other person as the Fund may designate, as
agreed upon by the parties.

3.4. The Fund, at its expense, shall provide the Company with copies of
its proxy statements, reports to shareholders, and other communications (except
for prospectuses and statements of additional information, which are covered in
section 3.1) to shareholders in such quantity as the Company shall reasonably
require for distribution to contract owners. The Fund or it s designee shall
bear the cost of printing, duplicating, and mailing of these documents to
current contract owners, and the Company shall bear the cost for such documents
used for purposes other than distribution to current contract owners.

3.5. If and to the extent required by law the Company shall:

(i) solicit voting instructions from contract owners;

(ii) vote the Fund shares in accordance with instructions
received from contract owners; and

(iii) vote Fund shares for which no instructions have been
received in the same proportion as Fund shares of such
Portfolio for which instructions have been received,

so long as and to the extent that the Securities and Exchange Commission
continues to interpret the 1940 Act to require pass-through voting privileges
for variable contract owners. The Company reserves the right to vote Fund
shares held in any segregated asset account in its own right, to the extent
permitted by law. The Fund and the Company shall follow the procedures, and
shall have the corresponding responsibilities, for the handling of proxy and
voting instruction solicitations, as set forth in Schedule C attached hereto and
incorporated herein by reference. Participating Insurance Companies shall be
responsible for ensuring that each of their separate accounts participating in
the Fund calculates voting privileges in a manner consistent with the standards
set forth on Schedule C, which standards will also be provided to the other
Participating Insurance Companies, if any.

3.6. The Fund will comply with all provisions of the 1940 Act requiring
voting by shareholders, including Sections 16(a) and, if and when applicable,
16(b). Further, the Fund will act in accordance with the Securities and
Exchange Commission's interpretation of the requirements of Section 16(a) with

7
<PAGE>

respect to periodic elections of trustees and with whatever rules the Commission
may promulgate with respect thereto.

3.7. The Fund shall use reasonable efforts to provide Fund prospectuses,
reports to shareholders, proxy materials and other Fund communications (or
camera-ready equivalents) to the Company sufficiently in advance of the
Company's mailing dates to enable the Company to complete, at reasonable cost,
the printing, assembling and/or distribution of the communications in accordance
with applicable laws and regulations.

ARTICLE IV. SALES MATERIAL AND INFORMATION

4.1. The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee, each piece of sales literature or other promotional
material in which the Fund or the Adviser(s) is named, at least fifteen Business
Days prior to its use. No such material shall be used if the Fund or its
designee reasonably objects to such use within fifteen Business Days after
receipt of such material.

4.2. The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund in
connection with the sale of the Variable Products other than the information or
representations contained in the registration statement or prospectus for the
Fund shares, as such registration statement and prospectus may be amended or
supplemented from time to time, or in reports or proxy statements for the Fund,
or in sales literature or other promotional material approved by the Fund or its
designee, except with the permission of the Fund.

4.3. The Fund or its designee shall furnish, or shall cause to be
furnished, to the Company or its designee, each piece of sales literature or
other promotional material in which the Company and/or its separate account(s)
is named at least fifteen Business Days prior to its use. No such material
shall be used if the Company or its designee reasonably objects to such use
within fifteen Business Days after receipt of such material.

4.4. The Fund and the Adviser shall not give any information or make any
representations on behalf of the Company or concerning the Company, each
Account, or the Variable Products, other than the information or representations
contained in a registration statement or prospectus for the Variable Products,
as such registration statement and prospectus may be amended or supplemented
from time to time, or in published reports for each Account which are in the
public domain or approved by the Company for distribution to contract owners, or
in sales literature or other promotional material approved by the Company or its
designee, except with the permission of the Company.

4.5. The Fund will provide to the Company at least one complete copy of
all registration statements, prospectuses, statements of additional information,
reports, proxy statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all amendments
to any of the above, that relate to the Fund or its shares, which are relevant
to the Company or the Variable Products.

4.6. The Company will provide to the Fund at least one complete copy of
all registration statements, prospectuses, statements of additional information,
reports, solicitations for voting instructions, sales literature and other
promotional materials, applications for exemptions, requests for no action
letters, and all amendments to any of the above, that relate to the investment
in the Fund under the Variable Products.

8
<PAGE>

4.7. For purposes of this Article IV, the phrase "sales literature or
other promotional material" includes, but is not limited to, any of the
following that refer to the Fund or any affiliate of the Fund: advertisements
(such as material published, or designed for use in, a newspaper, magazine, or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, or other public media), sales
literature (i.e., any written communication distributed or made generally
----
available to customers or the public, including brochures, circulars, research
reports, market letters, form letters, seminar texts, reprints or excerpts of
any other advertisement, sales literature, or published article), educational or
training materials or other communications distributed or made generally
available to some or all agents or employees, and registration statements,
prospectuses, statements of additional information, shareholder reports, and
proxy materials.

ARTICLE V. FEES AND EXPENSES

5.1. The Fund shall pay no fee or other compensation to the Company under
this Agreement, except that if the Fund or any Portfolio adopts and implements a
plan pursuant to Rule 12b-1 to finance distribution expenses, then the
Distributor may make payments to the Company or to the distributor for the
Variable Products if and in amounts agreed to by the Distributor in writing.

5.2. All expenses incident to performance by the Fund under this Agreement
shall be paid by the Fund, other than expenses assumed by the Adviser under the
Management Agreement between the Fund and the Adviser or by another party. The
Fund shall see to it that all its shares are registered and authorized for
issuance in accordance with applicable federal law and, if and to the extent
deemed advisable by the Fund, in accordance with applicable state laws prior to
their sale. The Fund shall bear the expenses for the cost of registration and
qualification of the Fund's shares, preparation and filing of the Fund's
prospectus and registration statement, proxy materials and reports, setting the
prospectus in type, setting in type and printing the proxy materials and reports
to shareholders (including the costs of printing a prospectus that constitutes
an annual report), the preparation of all statements and notices required by any
federal or state law, and all taxes on the issuance or transfer of the Fund's
shares.

ARTICLE VI. DIVERSIFICATION

6.1. The Fund will at all times invest money from the Variable Products in
such a manner as to ensure that the Variable Products will be treated as
variable contracts under the Code and the regulations issued thereunder.
Without limiting the scope of the foregoing, the Fund will at all times comply
with Section 817(h) of the Code and Treasury Regulation 1.817-5, relating to the
diversification requirements for variable annuity, endowment, or life insurance
contracts and any amendments or other modifications to such Section or
Regulations. In the event of a breach of this Article VI by the Fund, it will
take all reasonable steps (a) to notify Company of such breach and (b) to
adequately diversify the Fund so as to achieve compliance within the grace
period afforded by Regulation 1.817-5.

9
<PAGE>

ARTICLE VII. POTENTIAL CONFLICTS

7.1. The Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in the Fund. An irreconcilable material conflict
may arise for a variety of reasons, including: (a) an action by any state
insurance regulatory authority; (b) a change in applicable federal or state
insurance, tax, or securities laws or regulations, or a public ruling, private
letter ruling, no-action or interpretative letter, or any similar action by
insurance, tax, or securities regulatory authorities; (c) an administrative or
judicial decision in any relevant proceeding; (d) the manner in which the
investments of any Portfolio are being managed; (e) a difference in voting
instructions given by Variable Insurance Product owners; or (f) a decision by a
Participating Insurance Company to disregard the voting instructions of contract
owners. The Board shall promptly inform the Company if it determines that an
irreconcilable material conflict exists and the implications thereof.

7.2. Each of the Company and the Adviser will report any potential or
existing conflicts of which it is aware to the Board. Each of the Company and
the Adviser will assist the Board in carrying out its responsibilities under SEC
rules and regulations. The Adviser, and the participating insurance companies
and participating qualified plans will at least annually submit to the Board
such reports, materials, or data as the Board may reasonably request so that the
Board may fully carry out the obligations imposed upon by the conditions
contained in the Shared Funding Exemptive Order, and said reports, materials,
and data will be submitted more frequently if deemed appropriate by the Board.
The responsibilities to report such information and conflicts and to assist the
Board will be carried out with a view only to the interests of contract owners
and plan participants, as applicable.

7.3. If it is determined by a majority of the Board, or a majority of its
members, who are not "interested persons" of the Fund, the Adviser or the
Company as that term is defined in the 1940 Act (hereinafter "disinterested
members"), that a material irreconcilable conflict exists, the Company and other
Participating Insurance Companies shall, at their expense and to the extent
reasonably practicable (as determined by a majority of the disinterested
directors), take whatever steps are necessary to remedy or eliminate the
irreconcilable material conflict, up to and including: (1) withdrawing the
assets allocable to some or all of the separate accounts from the Fund or any
Portfolio and reinvesting such assets in a different investment medium,
including (but not limited to) another Portfolio of the Fund, or submitting the
question whether such segregation should be implemented to a vote of all
affected contract owners and, as appropriate, segregating the assets of any
appropriate group (i.e., annuity contract owners, life insurance policy owners,
----
or variable contract owners of one or more Participating Insurance Companies)
that votes in favor of such segregation, or offering to the affected contract
owners the option of making such a change; and (2) establishing a new registered
management investment company or managed separate account.

7.4. If a material irreconcilable conflict arises because of a decision by
the Company to disregard contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Fund's election, to withdraw the affected Account's
investment in the Fund and terminate this Agreement with respect to such Account
(at the Company's expense); provided, however that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested members
of the Board.

7.5. If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the Company will withdraw the
affected Account's investment in the Fund and terminate this Agreement

10
<PAGE>

with respect to such Account within six months after the Board informs the
Company in writing that it has determined that such decision has created an
irreconcilable material conflict; provided, however, that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested members
of the Board. Until the end of the foregoing six month period, the Distributor
and Fund shall continue to accept and implement orders by the Company for the
purchase (and redemption) of shares of the Fund.

7.6. For purposes of Sections 7.3 through 7.5 of this Agreement, a
majority of the disinterested members of the Board shall determine whether any
proposed action adequately remedies any irreconcilable material conflict, but in
no event will the Fund be required to establish a new funding medium for the
Variable Products. The Company shall not be required by Section 7.3 to
establish a new funding medium for the Variable Products if an offer to do so
has been declined by vote of a majority of contract owners materially adversely
affected by the irreconcilable material conflict.

7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or
Rule 6e-3 is adopted, to provide exemptive relief from any provision of the 1940
Act or the rules promulgated thereunder with respect to mixed or shared funding,
or if the Fund obtains a Shared Exemptive Order which requires provisions that
are materially different from the provisions of this Agreement, then (a) the
Fund and/or the Participating Insurance Companies, as appropriate, shall take
such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T), as
amended, and Rule 6e-3, as adopted, or to the terms of the Shared Exemptive
Order, to the extent applicable; and (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3, 7.4,
and 7.5 of this Agreement shall continue in effect only to the extent that terms
and conditions substantially identical to such Sections are contained in such
Rule(s) as so amended or adopted.

ARTICLE VIII. INDEMNIFICATION

8.1. Indemnification By The Company
------------------------------

8.1(a) The Company agrees to indemnify and hold harmless the Fund and the
Adviser, each of their respective officers, employees, and Trustees or
Directors, and each person, if any, who controls the Fund or the Adviser within
the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified
Parties" and individually, "Indemnified Party," for purposes of this Section
8.1) against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Company) or litigation
(including legal and other expenses), to which the Indemnified Parties may
become subject under any statute, regulation, at common law or otherwise,
insofar as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof) or settlements are related to the sale or acquisition of the
Fund's shares or the Variable Products and:

(i) arise out of or are based upon any untrue statements or alleged untrue
statements of any material fact contained in the registration statement or
prospectus for the Variable Products or contained in the Variable Products
or sales literature for the Variable Products (or any amendment or
supplement to any of the foregoing), or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify shall not apply as to
any Indemnified Party if such statement or omission or such alleged
statement or omission was made in reliance upon and in conformity with
information furnished to the Company by or on behalf of the Fund for use in
the registration statement or prospectus for the Variable Products or in
the Variable Products or sales literature (or any amendment or supplement)
or otherwise for use in connection with the sale of the Variable Products
or Fund shares; or

11
<PAGE>

(ii) arise out of or as a result of statements or representations (other
than statements or representations contained in the registration statement,
prospectus or sales literature of the Fund not supplied by the Company, or
persons under its control and other than statements or representations
authorized by the Fund or an Adviser) or unlawful conduct of the Company or
persons under its control, with respect to the sale or distribution of the
Variable Products or Fund shares; or

(iii) arise out of or as a result of any untrue statement or alleged
untrue statement of a material fact contained in a registration statement,
prospectus, or sales literature of the Fund or any amendment thereof or
supplement thereto or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, if such a statement or omission was made
in reliance upon and in conformity with information furnished to the Fund
by or on behalf of the Company; or

(iv) arise as a result of any failure by the Company to provide the
services and furnish the materials under the terms of this Agreement; or

(v) arise out of or result from any material breach of any representation
and/or warranty made by the Company in this Agreement or arise out of or
result from any other material breach of this Agreement by the Company, as
limited by and in accordance with the provisions of Sections 8.1(b) and
8.1(c) hereof.

8.1(b). The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or duties under this Agreement.

8.1(c). The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Company in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Company of any
such claim shall not relieve the Company from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Company shall be entitled to participate,
at its own expense, in the defense of such action. The Company also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the Company to such party of the
Company's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and the
Company will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation.

8.1(d). The Indemnified Parties will promptly notify the Company of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Fund shares or the Variable Products or the
operation of the Fund.

8.2. Indemnification by the Adviser
------------------------------

12
<PAGE>

8.2(a). The Adviser agrees, with respect to each Portfolio that it manages,
to indemnify and hold harmless the Company, each of its directors, officers, and
employees, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" and
individually, "Indemnified Party," for purposes of this Section 8.2) against any
and all losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Adviser) or litigation (including
legal and other expenses) to which the Indemnified Parties may become subject
under any statute, regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
or settlements are related to the sale or acquisition of shares of the Portfolio
that it manages or the Variable Products and:

(i) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration statement or
prospectus or sales literature of the Fund (or any amendment or supplement
to any of the foregoing), or arise out of or are based upon the omission or
the alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading,
provided that this agreement to indemnify shall not apply as to any
Indemnified Party if such statement or omission or such alleged statement
or omission was made in reliance upon and in conformity with information
furnished to the Fund by or on behalf of the Company for use in the
registration statement or prospectus for the Fund or in sales literature
(or any amendment or supplement) or otherwise for use in connection with
the sale of the Variable Products or Portfolio shares; or

(ii) arise out of or as a result of statements or representations (other
than statements or representations contained in the registration statement,
prospectus or sales literature for the Variable Products not supplied by
the Fund or persons under its control and other than statements or
representations authorized by the Company) or unlawful conduct of the Fund,
Adviser(s) or Distributor or persons under their control, with respect to
the sale or distribution of the Variable Products or Portfolio shares; or

(iii) arise out of or as a result of any untrue statement or alleged
untrue statement of a material fact contained in a registration statement,
prospectus, or sales literature covering the Variable Products, or any
amendment thereof or supplement thereto, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statement or statements therein not misleading, if
such statement or omission was made in reliance upon information furnished
to the Company by or on behalf of the Fund; or

(iv) arise as a result of any failure by the Fund to provide the services
and furnish the materials under the terms of this Agreement; or

(v) arise out of or result from any material breach of any representation
and/or warranty made by the Adviser in this Agreement or arise out of or
result from any other material breach of this Agreement by the Adviser; as
limited by and in accordance with the provisions of Sections 8.2(b) and
8.2(c) hereof.

8.2(b). The Adviser shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement.

8.2(c). The Adviser shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Adviser

13
<PAGE>

in writing within a reasonable time after the summons or other first legal
process giving information of the nature of the claim shall have been served
upon such Indemnified Party (or after such Indemnified Party shall have received
notice of such service on any designated agent), but failure to notify the
Adviser of any such claim shall not relieve the Adviser from any liability which
it may have to the Indemnified Party against whom such action is brought
otherwise than on account of this indemnification provision. In case any such
action is brought against the Indemnified Parties, the Adviser will be entitled
to participate, at its own expense, in the defense thereof. The Adviser also
shall be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from the Adviser to such party of
the Adviser's election to assume the defense thereof, the Indemnified Party
shall bear the fees and expenses of any additional counsel retained by it, and
the Adviser will not be liable to such party under this Agreement for any legal
or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.

8.2(d). The Company agrees promptly to notify the Adviser of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Variable Products or
the operation of each Account.

8.3. Indemnification by the Fund
---------------------------

8.3(a). The Fund agrees to indemnify and hold harmless the Company, and
each of its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act (hereinafter
collectively, the "Indemnified Parties" and individually, "Indemnified Party,"
for purposes of this Section 8.3) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent of
the Fund) or litigation (including legal and other expenses) to which the
Indemnified Parties may become subject under any statute, regulation, at common
law or otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof), litigation or settlements result from
the gross negligence, bad faith or willful misconduct of the Board or any member
thereof, are related to the operations of the Fund and:

(i) arise as a result of any failure by the Fund to provide the services
and furnish the materials under the terms of this Agreement; or

(ii) arise out of or result from any material breach of any representation
and/or warranty made by the Fund in this Agreement or arise out of or
result from any other material breach of this Agreement by the Fund, as
limited and in accordance with the provisions of Sections 8.3(b) and
8.3(a);

8.3(b). The Fund shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation incurred
or assessed against an Indemnified Party as may arise from such Indemnified
Party's gross negligence, bad faith, or willful misconduct the performance of
such Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations and duties under this Agreement.

8.3(c). The Fund shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified the Fund in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified Party (or after
such Indemnified Party shall have received notice of such service on any
designated agent), but failure to notify the Fund of any such claim shall not
relieve the Fund from any liability which it may have to the Indemnified Party
against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against the
Indemnified Parties, the Fund will be entitled to participate, at

14
<PAGE>

its own expense, in the defense thereof. The Fund also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Fund to such party of the Fund's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Fund will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.

8.3(d). The Company agrees promptly to notify the Fund of the commencement
of any litigation or proceedings against it or any of its respective officers or
directors in connection with this Agreement, the issuance or sale of the
Variable Products, with respect to the operation of either Account, or the sale
or acquisition of shares of the Fund.

ARTICLE IX. APPLICABLE LAW

9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts.

9.2. This Agreement shall be subject to the provisions of the 1933, 1934
and 1940 Acts, and the rules and regulations and rulings thereunder, including
such exemptions from those statutes, rules and regulations as the Securities and
Exchange Commission may grant (including, but not limited to, the Shared Funding
Exemptive Order) and the terms hereof shall be interpreted and construed in
accordance therewith.

ARTICLE X. TERMINATION

10.1. This Agreement shall continue in full force and effect until the
first to occur of:

10.1(a) termination by any party for any reason by at least sixty (60)
days advance written notice delivered to the other parties; or

10.1(b) termination by the Company by written notice to the Fund and the
Adviser with respect to any Portfolio based upon the Company's determination
that shares of such Portfolio are not reasonably available to meet the
requirements of the Variable Products; or

10.1(c) termination by the Company by written notice to the Fund and the
Adviser with respect to any Portfolio in the event any of the Portfolio's shares
are not registered, issued or sold in accordance with applicable state and/or
federal law or such law precludes the use of such shares as the underlying
investment media of the Variable Products issued or to be issued by the Company;
or

10.1(d) termination by the Company by written notice to the Fund and the
Adviser with respect to any Portfolio in the event that such Portfolio ceases to
qualify as a Regulated Investment Company under Subchapter M of the Code or
under any successor or similar provision, or if the Company reasonably believes
that the Fund may fail to so qualify; or

10.1(e) termination by the Company by written notice to the Fund and the
Adviser with respect to any Portfolio in the event that such Portfolio fails to
meet the diversification requirements specified in Article VI hereof; or

15
<PAGE>

material adverse change in its business, operations, financial condition or
prospects since the date of this Agreement or is the subject of material adverse
publicity, or

10.1(g) termination by the Company by written notice to the Fund and the
Adviser, if the Company shall determine, in its sole judgment exercised in good
faith, that either the Fund or the Adviser has suffered a material adverse
change in its business, operations, financial condition or prospects since the
date of this Agreement or is the subject of material adverse publicity; or

10.2. Notwithstanding any termination of this Agreement, the Fund shall,
at the option of the Company, continue to make available additional shares of
the Fund pursuant to the terms and conditions of this Agreement, for all
Variable Products in effect on the effective date of termination of this
Agreement (hereinafter referred to as "Existing Variable Products").
Specifically, without limitation, the owners of the Existing Variable Products
shall be permitted to direct reallocation of investments in the Portfolios of
the Fund, redemption of investments in the Portfolios of the Fund and/or
investment in the Portfolios of the Fund upon the making of additional purchase
payments under the Existing Variable Products. The parties agree that this
Section 10.2 shall not apply to any termination under Article VII and the effect
of such Article VII termination shall be governed by Article VII of this
Agreement.

10.3. The provisions of Article VIII Indemnification shall survive any
termination of this Agreement pursuant to this Article X Termination.

10.4. The Company shall not redeem Fund shares attributable to the
Variable Products (as distinct from Fund shares attributable to the Company's
assets held in the Account) except (i) as necessary to implement contract owner
initiated or approved transactions, or (ii) as required by state and/or federal
laws or regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption") or (iii) as
permitted by an order of the Securities and Exchange Commission pursuant to
Section 26(b) of the 1940 Act. Upon request, the Company will promptly furnish
to the Fund the opinion of counsel for the Company (which counsel shall be
reasonably satisfactory to the Fund) to the effect that any redemption pursuant
to clause (ii) above is a Legally Required Redemption. Furthermore, except in
cases where permitted under the terms of the Variable Products, the Company
shall not prevent contract owners from allocating payments to a Portfolio that
was otherwise available under the Variable Products without first giving the
Fund 90 days prior written notice of its intention to do so.

ARTICLE XI. NOTICES

Any notice shall be sufficiently given when hand delivered or sent by
registered or certified mail to the other party at the address of such party set
forth below or at such other address as such party may from time to time specify
in writing to the other party.

If to the Fund:
Allmerica Investment Trust
440 Lincoln Street
Worcester, MA 01653
Attention: George M. Boyd, Esq.

If to Adviser:
Allmerica Financial Investment Management Services, Inc.
440 Lincoln Street
Worcester, MA 01653
Attention: Abigail M. Armstrong, Esq.

16
<PAGE>

If to the Company:

First Allmerica Financial Life Insurance Company
440 Lincoln Street
Worcester, Massachusetts 01653
Attention: Richard M. Reilly, President

ARTICLE XII. MISCELLANEOUS

12.1. A copy of the Fund's Agreement and Declaration of Trust, as may be
amended from time to time, is on file with the Secretary of the Commonwealth of
Massachusetts. Notice is hereby given that this instrument is executed by the
Fund's Trustees as Trustees and not individually, and the Fund's obligations
under this Agreement are not binding upon any of the Trustees or Shareholders of
the Fund, but are binding only upon the assets and property of the Fund.

12.2. Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and addresses
of the owners of the Variable Products and all information reasonably identified
as confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information until such time as it may come into
the public domain without the express written consent of the affected party.

12.3. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.

12.4. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.

12.5. If any provision of this Agreement shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.

12.6. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the
Securities and Exchange Commission, the National Association of Securities
Dealers and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the California Insurance Commissioner with any information or
reports in connection with services provided under this Agreement which such
Commissioner may request in order to ascertain whether the insurance operations
of the Company are being conducted in a manner consistent with the California
Insurance Regulations and any other applicable law or regulations.

12.7. The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations
at law or in equity, which the parties hereto are entitled to under state and
federal laws.

17
<PAGE>

or under common control with the Adviser, if such assignee is duly licensed and
registered to perform the obligations of the Adviser under this Agreement.

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed in its name and on its behalf by its duly authorized representative and
its seal to be hereunder affixed hereto as of the date specified above.

FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY

By: /s/ Joseph W. MacDougall, Jr.
----------------------------------
NAME: Joseph W. MacDougall, Jr.
TITLE: Vice President

ALLMERICA INVESTMENT TRUST

By: /s/ Stephen W. Bright
----------------------------------
NAME: Stephen W. Bright
TITLE: Vice President

ALLMERICA FINANCIAL INVESTMENT MANAGEMENT SERVICES, INC.

By: /s/ Richard F. Betzler, Jr.
----------------------------------
NAME: Richard F. Betzler, Jr.
TITLE: Vice President

18
<PAGE>

SCHEDULE A

SEPARATE ACCOUNTS AND VARIABLE PRODUCTS
---------------------------------------

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------

VARIABLE LIFE PRODUCTS

SEPARATE ACCOUNT PRODUCT NAME 1933 ACT # 1940 ACT #
- ---------------- ------------ ---------- ----------
<S> <C> <C> <C>
VEL II VEL ('93) 33-71056 811-8130

Inheiritage Inheiritage 33-74184 811-8304
Select Inheiritage

Group VEL Group VEL 33-06383 811-7663

<CAPTION>
VARIABLE ANNUITY PRODUCTS

SEPARATE ACCOUNT PRODUCT NAME 1933 ACT # 1940 ACT #
- ---------------- ------------ ---------- ----------
<S> <C> <C> <C>
VA-K ExecAnnuity Plus 93 33-71052 811-8814
Allmerica Advantage

Allmerica Select Separate Account Allmerica Select Resource I 33-71058 811-8116
Allmerica Select Resource II
Separate Account I Variable Annuities 33-47858 811-6666

- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

SCHEDULE B

PORTFOLIOS OF
-------------
ALLMERICA INVESTMENT TRUST
--------------------------

Select Emerging Markets Fund
Select International Equity Fund
Select Aggressive Growth Fund
Select Capital Appreciation Fund
Select Value Opportunity Fund
Select Strategic Growth Fund
Select Growth Fund
Growth Fund
Equity Index Fund
Select Growth and Income Fund
Select Income Fund
Investment Grade Income Fund
Government Bond Fund
Money Market Fund
<PAGE>

SCHEDULE C

PROXY VOTING PROCEDURES
-----------------------

The following is a list of procedures and corresponding responsibilities for the
handling of proxies and voting instructions relating to the Fund. The defined
terms herein shall have the meanings assigned in the Participation Agreement
except that the term "Company" shall also include the department or third party
assigned by the Company to perform the steps delineated below.

. The proxy proposals are given to the Company by the Fund as early as
possible before the date set by the Fund for the shareholder meeting to
enable the Company to consider and prepare for the solicitation of voting
instructions from owners of the Variable Products and to facilitate the
establishment of tabulation procedures. At this time the Fund will inform
the Company of the Record, Mailing and Meeting dates. This will be done
verbally approximately two months before meeting.

. Promptly after the Record Date, the Company will perform a "tape run," or
other activity, which will generate the names, addresses and number of
units which are attributed to each contract owner/policyholder (the
"Customer") as of the Record Date. Allowance should be made for account
adjustments made after this date that could affect the status of the
Customers' accounts as of the Record Date.

Note: The number of proxy statements is determined by the activities
described above. The Company will use its best efforts to call in the
number of Customers to the Fund, as soon as possible, but no later than
two weeks after the Record Date.

. The Fund's Annual Report must be sent to each Customer by the Company
either before or together with the Customers' receipt of voting instruction
solicitation material. The Fund will provide the last Annual Report to the
Company pursuant to the terms of Section 3.43 of the Agreement to which
this Schedule relates.

. The text and format for the Voting Instruction Cards ("Cards" or "Card") is
provided to the Company by the Fund. The Company, at its expense, shall
produce and personalize the Voting Instruction Cards. The Fund or its
affiliate must approve the Card before it is printed. Allow approximately
2-4 business days for printing information on the Cards. Information
commonly found on the Cards includes:

. name (legal name as found on account registration)
. address
. fund or account number
. coding to state number of units
. individual Card number for use in tracking and verification of votes
(already on Cards as printed by the Fund).

(This and related steps may occur later in the chronological process due to
possible uncertainties relating to the proposals.)

. During this time, the Fund will develop, produce and pay for the Notice of
Proxy and the Proxy Statement (one document). Printed and folded notices
and statements will be sent to Company
<PAGE>

for insertion into envelopes (envelopes and return envelopes are provided
and paid for by the Company). Contents of envelope sent to Customers by the
Company will include:

. Voting Instruction Card(s)
. One proxy notice and statement (one document)
. return envelope (postage pre-paid by Company) addressed to the Company
or its tabulation agent
. "urge buckslip" - optional, but recommended. (This is a small, single
sheet of paper that requests Customers to vote as quickly as possible
and that their vote is important. One copy will be supplied by the
Fund.)
. cover letter - optional, supplied by Company and reviewed and approved
in advance by the Fund.

. The above contents should be received by the Company approximately 3-5
business days before mail date. Individual in charge at Company reviews
and approves the contents of the mailing package to ensure correctness and
completeness. Copy of this approval sent to the Fund.

. Package mailed by the Company.
* The Fund must allow at least a 15-day solicitation time to the Company
as the shareowner. (A 5-week period is recommended.) Solicitation
time is calculated as calendar days from (but not including,) the
---
meeting, counting backwards.

. Collection and tabulation of Cards begins. Tabulation usually takes place
in another department or another vendor depending on process used. An often
used procedure is to sort Cards on arrival by proposal into vote categories
of all yes, no, or mixed replies, and to begin data entry.

Note: Postmarks are not generally needed. A need for postmark information
would be due to an insurance company's internal procedure and has not been
required by the Fund in the past.

. Signatures on Card checked against legal name on account registration which
was printed on the Card.
Note: For Example, if the account registration is under "John A. Smith,
Trustee," then that is the exact legal name to be printed on the Card and
is the signature needed on the Card.

. If Cards are mutilated, or for any reason are illegible or are not signed
properly, they are sent back to Customer with an explanatory letter and a
new Card and return envelope. The mutilated or illegible Card is
disregarded and considered to be not received for purposes of vote
--- --------
tabulation. Any Cards that have been "kicked out" (e.g. mutilated,
illegible) of the procedure are "hand verified," i.e., examined as to why
they did not complete the system. Any questions on those Cards are usually
remedied individually.

. There are various control procedures used to ensure proper tabulation of
votes and accuracy of that tabulation. The most prevalent is to sort the
Cards as they first arrive into categories depending upon their vote; an
estimate of how the vote is progressing may then be calculated. If the
initial estimates and the actual vote do not coincide, then an internal
audit of that vote should occur. This may entail a recount.

. The actual tabulation of votes is done in units which is then converted to
shares. (It is very important that the Fund receives the tabulations stated
in terms of a percentage and the number of shares.) The Fund must review
------
and approve tabulation format.
<PAGE>

. Final tabulation in shares is verbally given by the Company to the Fund on
the morning of the meeting not later than 10:00 a.m. Eastern time. The Fund
may request an earlier deadline if reasonable and if required to calculate
the vote in time for the meeting.

. A Certification of Mailing and Authorization to Vote Shares will be
required from the Company as well as an original copy of the final vote.
The Fund will provide a standard form for each Certification.

. The Company will be required to box and archive the Cards received from the
Customers. In the event that any vote is challenged or if otherwise
necessary for legal, regulatory, or accounting purposes, the Fund will be
permitted reasonable access to such Cards.

. All approvals and "signing-off' may be done orally, but must always be
followed up in writing.

<PAGE>

EXHIBIT 12(A)

PARTICIPATION AGREEMENT

AMONG

ALLMERICA INVESTMENT TRUST

ALLMERICA FINANCIAL INVESTMENT MANAGEMENT SERVICES, INC.

AND

ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY

DATED

FEBRUARY 16, 1999
<PAGE>

TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>

ARTICLE I. Purchase of Fund Shares 4

ARTICLE II Representations and Warranties 5

ARTICLE III Prospectuses, Reports to Shareholders
and Proxy Statements, Voting 6

ARTICLE IV Sales Material and Information 8

ARTICLE V Fees and Expenses 9

ARTICLE VI Diversification 9

ARTICLE VII Potential Conflicts 10

ARTICLE VIII Indemnification 11

ARTICLE IX. Applicable Law 15

ARTICLE X Termination 15

ARTICLE XI Notices 16

ARTICLE XII Miscellaneous 17

SCHEDULE A Separate Accounts and Variable Products A -1

SCHEDULE B Portfolios of Allmerica Investment Trust B -1

SCHEDULE C Proxy Voting Procedures C -1
</TABLE>

2
<PAGE>

THIS AGREEMENT, made and entered into as of the 16/th/ day of February, 1999 by
and among: ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY (hereinafter
the "Company"), a Delaware corporation, on its own behalf and on behalf of each
separate account of the Company set forth on Schedule A hereto, as may be
amended from time to time (each such account hereinafter referred to as the
"Account"); ALLMERICA INVESTMENT TRUST, an unincorporated Massachusetts business
trust (hereinafter the "Fund"), and ALLMERICA FINANCIAL INVESTMENT MANAGEMENT
SERVICES, INC. (hereinafter the "Adviser"), a Massachusetts corporation

WHEREAS, the Company has registered or will register certain Variable
Products under the 1933 Act; and

3
<PAGE>

NOW, THEREFORE, in consideration of their mutual promises, the parties
hereto agree as follows:

ARTICLE I. PURCHASE OF FUND SHARES

1.5. The Company agrees that purchases and redemptions of Portfolio shares
offered by the then current prospectus of the Fund shall be made in accordance
with the provisions of such prospectus.

4
<PAGE>

1.8. The Fund shall furnish same day notice (by wire or telephone,
followed by written confirmation) to the Company of any income, dividends or
capital gain distributions payable on the Fund's shares. The Company hereby
elects to receive all such income dividends and capital gain distributions as
are payable on the Portfolio shares in additional shares of that Portfolio. The
Company reserves the right to revoke this election and to receive all such
income dividends and capital gain distributions in cash. The Fund shall notify
the Company of the number of shares so issued as payment of such dividends and
distributions.

ARTICLE II. REPRESENTATIONS AND WARRANTIES

5
<PAGE>

believing that the Variable Products have ceased to be so treated or that they
might not be so treated in the future.

2.10. The Company represents and warrants that all of its directors,
officers, employees, investment advisers, and other individuals/entities dealing
with the money and/or securities of the Fund are covered by a blanket fidelity
bond or similar coverage, in an amount not less $5 million. The aforesaid,
which includes coverage for larceny and embezzlement, shall be issued by a
reputable bonding company. The Company agrees to make all reasonable efforts to
see that this bond or another bond containing these provisions is always in
effect, and agrees to notify the Fund and the Distributor promptly in writing in
the event that such coverage no longer applies.

ARTICLE III. PROSPECTUSES, REPORTS TO SHAREHOLDERS AND PROXY STATEMENTS; VOTING

6
<PAGE>

3.3. The Fund's statement of additional information shall be obtainable
from the Fund, the Company or such other person as the Fund may designate, as
agreed upon by the parties.

3.4. The Fund, at its expense, shall provide the Company with copies of
its proxy statements, reports to shareholders, and other communications (except
for prospectuses and statements of additional information, which are covered in
section 3.1) to shareholders in such quantity as the Company shall reasonably
require for distribution to contract owners. The Fund or its designee shall
bear the cost of printing, duplicating, and mailing of these documents to
current contract owners, and the Company shall bear the cost for such documents
used for purposes other than distribution to current contract owners.

3.5. If and to the extent required by law the Company shall:

(i) solicit voting instructions from contract owners;

(ii) vote the Fund shares in accordance with instructions
received from contract owners; and

(iii) vote Fund shares for which no instructions have been
received in the same proportion as Fund shares of such
Portfolio for which instructions have been received,

7
<PAGE>

respect to periodic elections of trustees and with whatever rules the Commission
may promulgate with respect thereto.

ARTICLE IV. SALES MATERIAL AND INFORMATION

8
<PAGE>

ARTICLE V. FEES AND EXPENSES

ARTICLE VI. DIVERSIFICATION

9
<PAGE>

ARTICLE VII. POTENTIAL CONFLICTS

7.3. If it is determined by a majority of the Board, or a majority of its
members who are not "interested persons" of the Fund, the Adviser or the Company
as that term is defined in the 1940 Act (hereinafter "disinterested members"),
that a material irreconcilable conflict exists, the Company and other
Participating Insurance Companies shall, at their expense and to the extent
reasonably practicable (as determined by a majority of the disinterested
directors), take whatever steps are necessary to remedy or eliminate the
irreconcilable material conflict, up to and including: (1) withdrawing the
assets allocable to some or all of the separate accounts from the Fund or any
Portfolio and reinvesting such assets in a different investment medium,
including (but not limited to) another Portfolio of the Fund, or submitting the
question whether such segregation should be implemented to a vote of all
affected contract owners and, as appropriate, segregating the assets of any
appropriate group (i.e., annuity contract owners, life insurance policy owners,
----
or variable contract owners of one or more Participating Insurance Companies)
that votes in favor of such segregation, or offering to the affected contract
owners the option of making such a change; and (2) establishing a new registered
management investment company or managed separate account.

7.5. If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the

10
<PAGE>

Company will withdraw the affected Account's investment in the Fund and
terminate this Agreement with respect to such Account within six months after
the Board informs the Company in writing that it has determined that such
decision has created an irreconcilable material conflict; provided, however,
that such withdrawal and termination shall be limited to the extent required by
the foregoing material irreconcilable conflict as determined by a majority of
the disinterested members of the Board. Until the end of the foregoing six month
period, the Distributor and Fund shall continue to accept and implement orders
by the Company for the purchase (and redemption) of shares of the Fund.

ARTICLE VIII. INDEMNIFICATION

8.1. Indemnification By The Company
------------------------------

(i) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the registration
statement or prospectus for the Variable Products or contained in the
Variable Products or sales literature for the Variable Products (or any
amendment or supplement to any of the foregoing), or arise out of or are
based upon the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, provided that this agreement to indemnify shall not
apply as to any Indemnified Party if such statement or omission or such
alleged statement or omission was made in reliance upon and in conformity
with information furnished to the Company by or on behalf of the Fund for
use in the registration statement or prospectus for the Variable Products
or in the Variable Products or sales literature (or any amendment or
supplement) or otherwise for use in connection with the sale of the
Variable Products or Fund shares; or

11
<PAGE>

(iv) arise as a result of any failure by the Company to provide the
services and furnish the materials under the terms of this Agreement; or

(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this Agreement or
arise out of or result from any other material breach of this Agreement by
the Company, as limited by and in accordance with the provisions of
Sections 8.1(b) and 8.1(c) hereof.

8.2. Indemnification by the Adviser
------------------------------

12
<PAGE>

8.2(a). The Adviser agrees, with respect to each Portfolio that it
manages, to indemnify and hold harmless the Company, each of its directors,
officers, and employees, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified
Parties" and individually, "Indemnified Party," for purposes of this Section
8.2) against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Adviser) or litigation
(including legal and other expenses) to which the Indemnified Parties may become
subject under any statute, regulation, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements are related to the sale or acquisition of shares of the
Portfolio that it manages or the Variable Products and:

(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the registration
statement or prospectus or sales literature of the Fund (or any amendment
or supplement to any of the foregoing), or arise out of or are based upon
the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, provided that this agreement to indemnify shall not apply
as to any Indemnified Party if such statement or omission or such alleged
statement or omission was made in reliance upon and in conformity with
information furnished to the Fund by or on behalf of the Company for use in
the registration statement or prospectus for the Fund or in sales
literature (or any amendment or supplement) or otherwise for use in
connection with the sale of the Variable Products or Portfolio shares; or

(ii) arise out of or as a result of statements or representations (other
than statements or representations contained in the registration statement,
prospectus or sales literature for the Variable Products not supplied by
the Fund or persons under its control and other than statements or
representations authorized by the Company) or unlawful conduct of the Fund,
Adviser(s) or Distributor or persons under their control, with respect to
the sale or distribution of the Variable Products or Portfolio shares; or

(iv) arise as a result of any failure by the Fund to provide the services
and furnish the materials under the terms of this Agreement; or

(v) arise out of or result from any material breach of any
representation and/or warranty made by the Adviser in this Agreement or
arise out of or result from any other material breach of this Agreement by
the Adviser; as limited by and in accordance with the provisions of
Sections 8.2(b) and 8.2(c) hereof.

13
<PAGE>

8.2(c). The Adviser shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Adviser in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Adviser of any
such claim shall not relieve the Adviser from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Adviser will be entitled to participate, at
its own expense, in the defense thereof. The Adviser also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Adviser to such party of the Adviser's election
to assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Adviser will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.

8.3. Indemnification by the Fund
---------------------------

(i) arise as a result of any failure by the Fund to provide the services
and furnish the materials under the terms of this Agreement; or

14
<PAGE>

against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against the
Indemnified Parties, the Fund will be entitled to participate, at its own
expense, in the defense thereof. The Fund also shall be entitled to assume the
defense thereof, with counsel satisfactory to the party named in the action.
After notice from the Fund to such party of the Fund's election to assume the
defense thereof, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Fund will not be liable to such party
under this Agreement for any legal or other expenses subsequently incurred by
such party independently in connection with the defense thereof other than
reasonable costs of investigation.

ARTICLE IX. APPLICABLE LAW

9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts.

ARTICLE X. TERMINATION

10.1. This Agreement shall continue in full force and effect until the
first to occur of:

10.1(a) termination by any party for any reason by at least sixty (60)
days advance written notice delivered to the other parties; or

15
<PAGE>

10.1(f) termination by the Fund by written notice to the Company if the
Fund shall determine, in its sole judgment exercised in good faith, that the
Company and/or its affiliated companies has suffered a material adverse change
in its business, operations, financial condition or prospects since the date of
this Agreement or is the subject of material adverse publicity, or

10.3. The provisions of Article VIII Indemnification shall survive any
termination of this Agreement pursuant to this Article X Termination.

ARTICLE XI. NOTICES

If to the Fund:
Allmerica Investment Trust
440 Lincoln Street
Worcester, MA 01653
Attention: George M. Boyd, Esq.

If to Adviser:
Allmerica Financial Investment Management Services, Inc.
440 Lincoln Street

16
<PAGE>

Worcester, MA 01653
Attention: Abigail M. Armstrong, Esq.

If to the Company:

Allmerica Financial Life Insurance and Annuity Company
440 Lincoln Street
Worcester, Massachusetts 01653
Attention: Richard M. Reilly, President

ARTICLE XII. MISCELLANEOUS

12.3. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.

12.4. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.

12.5. If any provision of this Agreement shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.

17
<PAGE>

12.8. This Agreement or any of the rights and obligations hereunder may
not be assigned by any party without the prior written consent of all parties
hereto; provided, however, that the Adviser may assign this Agreement or any
rights or obligations hereunder to any affiliate of or company controlled by or
under common control with the Adviser, if such assignee is duly licensed and
registered to perform the obligations of the Adviser under this Agreement.

ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY

By: /s/ Joseph W. MacDougall, Jr.
-----------------------------
NAME: Joseph W. MacDougall, Jr.
TITLE: Vice President

ALLMERICA INVESTMENT TRUST

By: /s/ Stephen W. Bright
---------------------
NAME: Stephen W. Bright
TITLE: Vice President

ALLMERICA FINANCIAL INVESTMENT MANAGEMENT SERVICES, INC.

By: /s/ Richard F. Betzler, Jr.
---------------------------
NAME: Richard F. Betzler, Jr.
TITLE: Vice President

18
<PAGE>

SCHEDULE A

<TABLE>
<CAPTION>
SEPARATE ACCOUNTS AND VARIABLE PRODUCTS
---------------------------------------
- -------------------------------------------------------------------------------------------------------------
VARIABLE LIFE PRODUCTS

SEPARATE ACCOUNT PRODUCT NAME 1933 ACT # 1940 ACT #
- ---------------- ------------ ---------- ----------
<S> <C> <C> <C>
VEL VEL ('87) 33-14672 811-5183

VEL VEL ('91) 33-90320 811-5183

VEL II VEL ('93) 33-57792 811-7466

VEL VEL (Plus) 33-42687 811-5183

Inheiritage Inheiritage 33-70948 811-8120
Select Inheiritage

Allmerica Select Separate Account II Select Life 33-83604 811-8746

Group VEL Group VEL 33-82658 811-08704

<CAPTION>
VARIABLE ANNUITY PRODUCTS

SEPARATE ACCOUNT PRODUCT NAME 1933 ACT# 1940 ACT #
- ---------------- ------------ --------- ----------
<S> <C> <C> <C>
VA-K ExecAnnuity Plus 91 33-39702 811-6293
ExecAnnuity Plus 93
Allmerica Advantage

Allmerica Select Separate Account Allmerica Select Resource I 33-47216 811-6632
Allmerica Select Resource II
Separate Accounts VA-A, VA-B,
VA-C, VA-G, VA-H Variable Annuities (discontinued)
- -------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

SCHEDULE B

PORTFOLIOS OF
-------------
ALLMERICA INVESTMENT TRUST
--------------------------

SCHEDULE C

PROXY VOTING PROCEDURES
-----------------------

Note: The number of proxy statements is determined by the activities
described above. The Company will use its best efforts to call in the
number of Customers to the Fund , as soon as possible, but no later than
two weeks after the Record Date.

(This and related steps may occur later in the chronological process due to
possible uncertainties relating to the proposals.)

. During this time, the Fund will develop, produce and pay for the Notice of
Proxy and the Proxy Statement (one document). Printed and folded notices
and statements will be sent to Company
<PAGE>

for insertion into envelopes (envelopes and return envelopes are provided
and paid for by the Company). Contents of envelope sent to Customers by the
Company will include:

. Collection and tabulation of Cards begins. Tabulation usually takes place
in another department or another vendor depending on process used. An
often used procedure is to sort Cards on arrival by proposal into vote
categories of all yes, no, or mixed replies, and to begin data entry.

Note: Postmarks are not generally needed. A need for postmark information
would be due to an insurance company's internal procedure and has not been
required by the Fund in the past.

. Final tabulation in shares is verbally given by the Company to the Fund on
the morning of the meeting not later than 10:00 a.m. Eastern time. The
Fund may request an earlier deadline if reasonable and if required to
calculate the vote in time for the meeting.

. All approvals and "signing-off' may be done orally, but must always be
followed up in writing.

<PAGE>

EXHIBIT 16

POWER OF ATTORNEY

We, the undersigned, hereby severally constitute and appoint Richard M. Reilly,
Joseph W. MacDougall, Jr., George M. Boyd and Gregory D. Sheehan, and each of
them singly, our true and lawful attorneys, with full power to them and each of
them, to sign for us, and in our names and in any and all capacities, any and
all amendments, including post-effective amendments, to the Registration
Statement on Form N-1A of Allmerica Investment Trust and to file the same with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys and each of
them, acting alone, full power and authority to do and perform each and every
act and thing requisite or necessary to be done in the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys or any of them may lawfully do or cause
to be done by virtue hereof. Witness our hands on the date set forth below.

SIGNATURE TITLE DATE
- --------- ----- ----

/s/ John F. O'Brien Chairman of the Board and Trustee 2/16/99
- ------------------------- -------
John F. O'Brien

/s/ Richard M. Reilly President, Chief Executive Officer 2/16/99
- ------------------------- -------
Richard M. Reilly and Trustee

/s/ David J. Mueller Treasurer (Principal Accounting Officer) 2/16/99
- ------------------------- -------
David J. Mueller

/s/ P. Kevin Condron Trustee 2/16/99
- ------------------------- -------
P. Kevin Condron

/s/ Cynthia A. Hargadon Trustee 2/16/99
- ------------------------- -------
Cynthia A. Hargadon

/s/ Gordon Holmes Trustee 2/16/99
- ------------------------- -------
Gordon Holmes

/s/ John P. Kavanaugh Trustee 2/16/99
- ------------------------- -------
John P. Kavanaugh

/s/ Bruce E. Langton Trustee 2/16/99
- ------------------------- -------
Bruce E. Langton

/s/ Attiat F. Ott Trustee 2/16/99
- ------------------------- -------
Attiat F. Ott

/s/ Ranne P. Warner Trustee 2/16/99
- ------------------------- -------
Ranne P. Warner