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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(Amendment No. _____)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Allmerica Investment Trust
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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ALLMERICA INVESTMENT TRUST:
CORE EQUITY FUND AND MONEY MARKET FUND
440 LINCOLN STREET, WORCESTER, MA 01653
----------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
----------------------
To the Shareholders:
Notice is hereby given that a Special Meeting of Shareholders (the
"Meeting") of the Core Equity Fund and Money Market Fund (together, the
"Funds"), two separate series of Allmerica Investment Trust (the "Trust"),
will be held at the offices of the Trust at 440 Lincoln Street, Worcester,
Massachusetts 01653 on Wednesday, August 16, 2000 at 10:00 a.m., local time.
At the Meeting, you and other shareholders of the two Funds will be asked to
consider and vote separately:
1. To approve or disapprove an Amendment to the Management Agreement
between Allmerica Financial Investment Management Services, Inc. and the
Trust, as set forth in Exhibit I to the attached Proxy Statement, which
includes proposed changes in the management fee schedules for the Core
Equity Fund and Money Market Fund.
2. To transact such other business as may properly come before the
Meeting, or any adjournment thereof.
Shareholders of record as of the close of business on June 21, 2000 are
entitled to notice of, and to vote at, the Meeting or at any adjournment
thereof. Your attention is called to the accompanying Proxy Statement.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE URGED TO COMPLETE,
SIGN AND DATE AND RETURN PROMPTLY THE ENCLOSED PROXY CARD. If you do attend
the Meeting, you may revoke the Proxy and vote in person.
Worcester, MA
July 12, 2000
By order of the Trustees
George M. Boyd
Secretary
<PAGE>
ALLMERICA INVESTMENT TRUST:
CORE EQUITY FUND AND MONEY MARKET FUND
440 LINCOLN STREET, WORCESTER, MASSACHUSETTS 01653
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
AUGUST 16, 2000
The enclosed Proxy is solicited on behalf of the Trustees of Allmerica
Investment Trust, a Massachusetts business trust (the "Trust"), to be voted at
a Special Meeting (the "Meeting") of Shareholders of the Core Equity Fund
(formerly the Growth Fund) and Money Market Fund (together, the "Funds"), two
separate series of the Trust, to be held at the offices of the Trust, 440
Lincoln Street, Worcester, MA 01653 at 10:00 a.m., local time, on Wednesday,
August 16, 2000 for the purposes set forth in the accompanying Notice. The
mailing date of this Proxy Statement is on or about July 12, 2000.
At the Meeting, Shareholders of the Core Equity Fund and Money Market Fund
will be asked to vote on a proposal to amend the Management Agreement between
Allmerica Financial Investment Management Services, Inc. ("AFIMS") and the
Trust relating to those two Funds. The Shareholders of each Fund will vote on
the proposal separately.
A Shareholder may revoke the accompanying Proxy at any time prior to its use
by filing with the Secretary of the Trust a written revocation or duly
executed Proxy bearing a later date. The Proxy will not be voted if the
Shareholder is present at the Meeting and elects to vote in person. Attendance
at the Meeting alone will not serve to revoke the Proxy.
In addition to the solicitation of Proxies by mail, officers and employees
of the Trust, without additional compensation, may solicit Proxies in person
or by telephone. The costs associated with such solicitation and the Meeting
will be borne by the Funds.
The Trust will furnish, without charge, a copy of the most recent Annual
Report to the Shareholders of the Funds and their most recent Semi-Annual
Report succeeding the Annual Report, if available. Requests should be directed
to the Trust at 440 Lincoln Street, Worcester, Massachusetts 01653 or by
calling 1-800-828-0540.
The Trust's investment manager is Allmerica Financial Investment Management
Services, Inc. ("AFIMS"), an indirect wholly-owned subsidiary of Allmerica
Financial Corporation ("AFC"), a publicly-traded Delaware holding company for
a group of affiliated companies, the largest of which is First Allmerica
Financial Life
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Insurance Company ("First Allmerica"). AFIMS is also an indirect wholly-owned
subsidiary of First Allmerica and a direct wholly-owned subsidiary of
Allmerica Financial Life Insurance and Annuity Company ("Allmerica Financial
Life"). The address of AFIMS, AFC, First Allmerica and Allmerica Financial
Life is 440 Lincoln Street, Worcester, MA 01653. Investors Bank & Trust
Company calculates net asset value per share, maintains general accounting
records and performs certain administrative services for the Trust. Its
address is 200 Clarendon Street, 16/th/ Floor, Boston, MA 02116.
The shares of the Funds currently are purchased only by separate accounts
("Separate Accounts") established by First Allmerica or Allmerica Financial
Life for the purpose of funding variable annuity contracts and variable life
insurance policies (such contracts and policies are referred to hereafter as
"Contracts") issued by First Allmerica or Allmerica Financial Life. Subject to
certain exceptions with respect to unregistered Separate Accounts, First
Allmerica and Allmerica Financial Life will vote the shares of the Funds held
in each Separate Account in accordance with instructions received from
variable life insurance policy owners and variable annuity contract owners or
participants (collectively, "Contract Owners") with respect to all matters on
which Fund shareholders are entitled to vote. Except when otherwise permitted
by applicable law or regulation, interests in Contracts for which no Proxies
are received will be voted in proportion to the Proxy instructions which are
received from Contract Owners. First Allmerica and Allmerica Financial Life
also will vote shares in a registered Separate Account that they own and which
are not attributable to Contracts in the same proportion.
If the proposal, as stated herein, is approved by Shareholders of your Fund,
you will be notified of the change. If you are a Contract Owner affected by
the change, you will be given the option to request transfer of your invested
holdings to the other investment options available under the contracts without
charge on written request within sixty (60) days of the later of (1) the
effective date of such change, or (2) your receipt of the notice of the right
to transfer.
As of the close of business on June 21, 2000, there were 325,504,480.01
shares of the Core Equity Fund outstanding and 436,018,471.51 shares of the
Money Market Fund outstanding. Each share is entitled to one vote and each
fractional share to an equivalent fractional vote. Only Shareholders of record
at the close of business on June 21, 2000 will be entitled to notice of and to
vote at the Meeting.
In the event that a quorum of Shareholders (30% of the shares entitled to
vote at the Meeting) is not represented at the Meeting or at any adjournments
thereof, or, even though a quorum is so represented, if sufficient votes in
favor of the matters set forth in the Notice of Meeting are not received by
August 16, 2000, the persons named as proxies may propose one or more
adjournments of the Meeting and further solicitation
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of proxies may be made. Any such adjournment may be effected by a majority of
the votes properly cast in person or by proxy on the question at the session
of the Meeting to be adjourned. The persons named as proxies will vote in
favor of such adjournment those proxies which they are entitled to vote in
favor of the matters set forth in the Notice of the Meeting. They will vote
against any such adjournment those proxies required to be voted against any
such matters.
The persons named in the accompanying Proxy will vote in each case as
directed by the Proxy, but in the absence of such voting directions, they
intend to vote FOR the proposal and may vote in their discretion with respect
to other matters not now known to the Board of Trustees that may be presented
at the Meeting.
1. APPROVAL OR DISAPPROVAL OF AN AMENDMENT TO THE MANAGEMENT AGREEMENT BETWEEN
ALLMERICA FINANCIAL INVESTMENT MANAGEMENT SERVICES, INC. AND ALLMERICA
INVESTMENT TRUST RELATING TO THE CORE EQUITY FUND AND MONEY MARKET FUND
The Shareholders of the Core Equity Fund and Money Market Fund are being
asked by the Trustees to approve an amendment (the "Amendment") to the
Management Agreement (the "Management Agreement") between AFIMS and the Trust
dated April 16, 1998, which provides for changes in the management fees
payable by the Funds to AFIMS. Except for the revised fee schedules which are
proposed with respect to the Funds, the Management Agreement, as amended,
would be the same in all substantive respects as the Management Agreement
presently in effect. The Management Agreement was last submitted to
Shareholders of the Core Equity Fund on August 15, 1997 for the purpose of
increasing the management fee. The Management Agreement was last submitted to
Shareholders of the Money Market Fund on June 16, 1992 for the purpose of
appointing a new investment manager. The proposed changes to the fee schedules
were approved by the Board of Trustees of the Trust, including all of the
"non-interested" Trustees, as defined under the Investment Company Act of 1940
(the "1940 Act"), at a meeting on May 15, 2000. A copy of the Management
Agreement, including the Amendment, is set forth in Exhibit I to this Proxy
Statement and the description of the Management Agreement set forth in this
Proxy Statement is qualified in its entirety by reference to Exhibit I.
Proposed Fee Changes
Under the Amendment, the existing graduated fee schedules would be revised
and the level of management fees would be increased for the Core Equity Fund
and the Money Market Fund. The proposed changes in management fees would have
a direct effect on the level of expenses of each Fund.
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Following are schedules showing the fees currently paid by the Core Equity
Fund and Money Market Fund compared to the fees proposed under the Amendment.
Core Equity Fund
For its services, AFIMS currently receives and, under the proposal would
receive, fees computed daily at an annual rate based on the average daily net
asset value of the Core Equity Fund as set forth below.
<TABLE>
<CAPTION>
Assets Current Management Fee
------ -----------------------
<S> <C>
First $250 million................................... 0.60%
Next $250 million.................................... 0.40%
Over $500 million.................................... 0.35%
<CAPTION>
Assets Proposed Management Fee
------ -----------------------
<S> <C>
First $250 million................................... 0.60%
Next $250 million.................................... 0.55%
Next $250 million.................................... 0.50%
Over $750 million.................................... 0.45%
At net asset levels as of May 31, 2000, the effective management fee rates
for the current and proposed management fee schedules would be 0.421% and
0.521%, respectively.
Money Market Fund
For its services, AFIMS currently receives and, under the proposal would
receive, fees computed daily at an annual rate based on the average daily net
asset value of the Money Market Fund as set forth below.
<CAPTION>
Assets Current Management Fee
------ -----------------------
<S> <C>
First $50 million.................................... 0.35%
Next $200 million.................................... 0.25%
Over $250 million.................................... 0.20%
<CAPTION>
Assets Proposed Management Fee
------ -----------------------
<S> <C>
First $100 million................................... 0.35%
Next $400 million.................................... 0.30%
Next $250 million.................................... 0.25%
Over $750 million.................................... 0.20%
</TABLE>
At net asset levels as of May 31, 2000, the effective management fee rates
for the current and proposed management fee schedules would be 0.245% and
0.313%, respectively.
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The following table shows (i) the aggregate amount of management fees paid
during the fiscal year ended December 31, 1999; (ii) the amounts that would
have been paid had the proposed management fees been in effect; and (iii) the
difference between the aggregate amounts stated for items (i) and (ii) above
as a percentage of the amounts stated for item (i).
<TABLE>
<CAPTION>
(iii)
(i) (ii) Percentage
Management fees Amounts that difference
paid during would have been between
fiscal year ended paid if proposed fees (i) and
Fund December 31, 1999 had been in effect (ii)
---- ----------------- --------------------- ----------
<S> <C> <C> <C>
Core Equity Fund............. $4,047,919 $4,992,154 23.33%
Money Market Fund............ $1,019,642 $1,317,098 29.17%
</TABLE>
At net asset levels as of May 31, 2000, the increase in the management fees
of the Core Equity Fund would amount to $1,053,555, or 23.74% and the increase
in the management fees of the Money Market Fund would amount to $263,474, or
27.68%.
Under the proposal, the base level fee percentages would remain the same
while the existing break points or break point rates would be changed.
Considering the management fees paid by competing funds, the Trustees
concluded that the proposed fee increases are fair and reasonable. Data
reviewed by the Trustees showed that the current fee rates for the two Funds
are below industry averages for comparable funds. Giving effect to the
proposed increases, the Funds' management fees would remain below the industry
averages for comparable funds. The Trustees compared the performance of each
Fund over different time periods to the performance of other similar funds and
each Fund's benchmark index, the S&P 500 Index for the Core Equity Fund and
the IBC/Donoghue First Tier Money Market Index for the Money Market Fund. From
this information, they determined that each Fund's relative performance has
been competitive.
The Trustees reviewed information showing the pretax profit margins earned
by AFIMS and AFC, its parent company, on the Core Equity Fund and Money Market
Fund. They also reviewed profitability data on a pro forma basis assuming that
the proposed management fee increase had been in effect during the year ended
December 31, 1999. The Trustees recognized that the growth of assets under
management by AFIMS would have positive effects on its profitability even
without the proposed fee increase; however, the Trustees also considered the
fact that the proposed fee increase could enhance its ability to serve the
Funds. In considering the fee proposal, the Trustees noted that the Funds
operate in a highly competitive, rapidly changing business environment. They
determined that the increased management fees would help AFIMS remain
competitive by providing additional resources that are needed to administer
the Funds, considering the complexities of today's global securities markets.
The Trustees concluded that additional resources could, for example, help
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management build and maintain state-of-the-art computer systems, develop
strategies using the latest analytic tools and methodologies and access needed
information.
In accordance with the terms of the Management Agreement, AFIMS at its
expense has contracted with Sub-Advisers to manage the investments of each of
the Funds. The Trustees determined that AFIMS adds value in its role as the
Trust's investment manager by supervising each Fund's Sub-Adviser and closely
monitoring its performance. BARRA RogersCasey, Inc., a pension consulting
firm, assists AFIMS with its oversight responsibility. The cost of
RogersCasey's services are borne entirely by AFIMS. In making its
recommendation to approve the Amendment, the Trustees carefully evaluated the
quality and scope of the services AFIMS has provided and is expected to
continue to provide, AFIMS' costs, the expense ratios of other comparable
funds, the impact the fee changes would have on each Fund's expenses and other
factors they deemed relevant.
Based on the factors discussed above, the Trustees concluded that the
proposed fee changes as set forth in the Amendment are in the best interest of
the respective Funds and their shareholders. The Trustees reached this
conclusion after thorough discussion and analysis, believing they had
carefully examined the pertinent questions and alternatives. In doing so, the
non-interested Trustees were advised by independent counsel, retained by the
non-interested Trustees and paid by the Funds, as to the nature of the matters
to be considered and the standards to be used in reaching their decisions.
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The following tables show, with respect to each of the Core Equity Fund and
the Money Market Fund, (i) the actual expenses paid based on amounts incurred
during the most recent fiscal year, and (ii) pro forma expenses using the
proposed management fee schedules.
Expense Summary
Comparative Fee Tables
Core Equity Fund and Money Market Fund
Core Equity Fund Expenses
<TABLE>
<CAPTION>
Annual Fund Operating Expenses
(expenses deducted from Fund
Shareholder Fees assets) Total Annual
(fees paid -------------------------------- Fund
directly from Management Distribution Other Operating
your investment Fees (12b-1) Fees Expenses Expenses
---------------- ---------- ------------ -------- ------------
<S> <C> <C> <C> <C> <C>
Actual Expenses......... None 0.43% None 0.05% 0.48%(1),(2)
Pro Forma Expenses...... None 0.53% None 0.05% 0.58%(1),(2)
</TABLE>
-----------
(1) Through December 31, 2000, Allmerica Financial Investment Management
Services Inc. has declared a voluntary expense limitation of 1.20% for the
Core Equity Fund. The total operating expenses of the Fund of the Trust
was less than its respective expense limitation throughout 1999.
The declaration of a voluntary management fee or expense limitation in any
year does not bind AFIMS to declare future expense limitations with
respect to the Fund. These limitations may be terminated at any time.
(2) The Fund has 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 ratio would have been
0.45% (actual) or 0.55% (pro forma) for the Core Equity Fund.
Example
The investor would pay the following expenses on a $10,000 investment,
assuming (1) a 5% return each year and (2) that the Fund's operating expenses
remain the same.
<TABLE>
<CAPTION>
Fund 1 Year 3 Years 5 Years 10 Years
---- ------ ------- ------- --------
<S> <C> <C> <C> <C>
Actual Expenses................................. $49 $154 $269 $605
Pro Forma Expenses.............................. $59 $186 $325 $727
</TABLE>
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Money Market Fund Expenses
<TABLE>
<CAPTION>
Annual Fund Operating Expenses
(expenses deducted from Fund Total
Shareholder Fees assets) Annual
(fees paid -------------------------------- Fund
directly from Management Distribution Other Operating
your investment) Fees (12b-1) Fees Expenses Expenses
---------------- ---------- ------------ -------- ----------
<S> <C> <C> <C> <C> <C>
Actual Expenses......... None 0.24% None 0.05% 0.29%/(1)/
Pro Forma Expenses...... None 0.31% None 0.05% 0.36%/(1)/
</TABLE>
-----------
(1) Through December 31, 2000, Allmerica Financial Investment Management
Services, Inc. has declared a voluntary expense limitation of 0.60% for
the Money Market Fund. The total operating expenses of the Fund of the
Trust was less than its respective expense limitation throughout 1999.
The declaration of a voluntary management fee or expense limitation in any
year does not bind AFIMS to declare future expense limitations with
respect to the Fund. These limitations may be terminated at any time.
Example
The investor would pay the following expenses on a $10,000 investment,
assuming (1) a 5% return each year and (2) that the Fund's operating expenses
remain the same.
<TABLE>
<CAPTION>
Fund 1 Year 3 Years 5 Years 10 Years
---- ------ ------- ------- --------
<S> <C> <C> <C> <C>
Actual Expenses................................. $30 $ 93 $163 $369
Pro Forma Expenses.............................. $37 $116 $202 $456
</TABLE>
These tables describe the fees and expenses that you may pay if you invest
in the Funds. Please note that the expenses listed in the tables above do not
include the expenses of the applicable variable insurance product that you are
purchasing.
Management Agreement
AFIMS serves as investment manager of the Trust pursuant to a Management
Agreement between AFIMS and the Trust dated April 16, 1998. The existing
Management Agreement was last approved by the Trustees, including the Trustees
who are not interested persons, as defined under the 1940 Act, at a meeting of
the Board of Trustees on May 15, 2000. Except for the different fee schedules,
the terms of the Management Agreement, as amended, are the same in all
material respects to the terms of the existing Management Agreement. Under the
Management Agreement, AFIMS continuously provides business management services
to the Funds of the Trust and, subject to the general oversight of the
Trustees, manages all of the administrative and day-to-day business affairs of
the Trust. AFIMS also has general oversight responsibility for the management
of the investments of the portfolios of the Trust,
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subject to such policies and instructions as the Trustees may from time to
time establish. AFIMS, at its expense, has contracted with investment Sub-
Advisers to manage the investments of the Funds of the Trust. Currently,
Miller, Anderson & Sherrerd, LLP serves as Sub-Adviser to the Core Equity Fund
and Allmerica Asset Management, Inc. ("AAM"), serves as Sub-Adviser of the
Money Market Fund. AAM is a direct, wholly-owned subsidiary of AFC and an
affiliate of AFIMS. The fees paid to the Sub-Advisers are not being changed.
Each Sub-Adviser of the Trust has been selected on the basis of various
factors including management experience, investment techniques and staffing.
The Sub-Advisers have been selected by AFIMS and the Trustees in consultation
with BARRA RogersCasey which assists AFIMS in continuously monitoring and
evaluating the performance of each of the Sub-Advisers. The costs of BARRA
RogersCasey's services are borne entirely by AFIMS.
The Management Agreement, as amended, shall continue in full force and
effect with respect to a Fund for successive periods of one year only so long
as such continuance is specifically approved annually by the Board of
Trustees, or by a vote of the holders of a majority of that Fund's outstanding
voting securities, and by a vote of a majority of the Trustees who are not
interested persons of the Trust, AFIMS or any sub-adviser to the Trust. The
Management Agreement may be terminated at any time as to any Fund, without
payment of penalty, by AFIMS, by vote of the Trustees or by vote of a majority
of the outstanding voting securities of that Fund, in each case on 60 days'
written notice. As required by the 1940 Act, the Management Agreement will
automatically terminate, without the payment of any penalty, in the event of
its assignment.
The Management Agreement provides that, in the absence of (i) willful
misfeasance, bad faith or gross negligence on the part of AFIMS, or (ii)
reckless disregard by AFIMS of its obligations and duties under the Management
Agreement, AFIMS shall not be liable to the Trust or a Fund, or to any
shareholder of the Fund, for any act or omission in the course of, or
connected with, rendering services under the Management Agreement.
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Additional Information Regarding AFIMS
AFIMS and its predecessor, Allmerica Investment Management Company, Inc.,
have managed mutual funds since 1985. Following is information on the type,
size and management fees of one other portfolio of the Trust having an
investment objective similar to the Core Equity Fund.
(AFIMS has declared a voluntary expense limitation not reflected in this
table.)
<TABLE>
<CAPTION>
Net Assets
Fund as of 5/31/00 Fee Rate
---- -------------- --------
<S> <C> <C> <C> <C>
Select Growth Fund...................... $1,188,135,348 First $250 Million 0.85%
Next $250 Million 0.80%
Next $250 Million 0.75%
Over $750 Million 0.70%
</TABLE>
Had this fee schedule applied to the Core Equity Fund at net asset levels as
of May 31, 2000, the effective annual management fee would have been
$8,124,886, an effective rate of 0.771%.
The Directors of AFIMS are: John F. O'Brien, Richard M. Reilly and Eric A.
Simonsen. The business address of each is the address of AFIMS' office. Mr.
Reilly is also President of AFIMS. Mr. Simonsen is a Director and Vice
President of First Allmerica and Allmerica Financial Life. Mr. O'Brien also
serves as a Trustee and Chairman of the Board of the Trust; President and
Chief Executive Officer of First Allmerica; and Director and Chairman of the
Board of Allmerica Financial Life. Mr. Reilly is President and a Trustee of
the Trust; President of Allmerica Financial Life; Vice President of First
Allmerica; and President of AFIMS. John P. Kavanaugh serves as a Vice
President of AFIMS, a Trustee and Vice President of the Trust, Chief
Investment Officer and Vice President of First Allmerica and Allmerica
Financial Life, and President of AAM, an indirect wholly-owned subsidiary of
AFC; George M. Boyd is Secretary of the Trust, Counsel for AFIMS and an
Assistant Vice President for First Allmerica; Paul T. Kane is Chief Compliance
Officer and Vice President of AFIMS and Assistant Vice President and Treasurer
of the Trust; Ann K. Tripp is a Vice President of the Trust and of AAM, and a
Vice President of First Allmerica and Allmerica Financial Life; John C.
Donohue is a Vice President of the Trust and of AAM and an Assistant Treasurer
of First Allmerica and Allmerica Financial Life; Richard J. Litchfield is a
Vice President of the Trust and of AAM and an Assistant Treasurer of First
Allmerica and Allmerica Financial Life.
No arrangements or understandings exist between AFIMS and the Trustees with
respect to the composition of the Board of Trustees of the Trust or the Board
of Directors of AFIMS or with respect to the selection or appointment of any
person to any office with either of them. During the fiscal year ended
December 31, 1999, no commissions were paid to any brokers affiliated with
AFIMS.
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Recommendation and Required Votes
As provided in the 1940 Act, approval of the Amendment to the Management
Agreement with respect to the Funds requires the affirmative vote of a
majority of the outstanding voting securities (as defined in the Miscellaneous
section) of each Fund. Abstentions have the effect of a negative vote on the
proposal to approve the Amendment. If the Shareholders of a Fund fail to
approve the Amendment, AFIMS will continue to serve as manager of that Fund in
accordance with the terms of the existing Management Agreement.
The Trustees recommend that Shareholders of the Core Equity Fund and Money
Market Fund vote to approve the Amendment.
MISCELLANEOUS
Definition of Majority. "Majority of the outstanding voting securities"
means the affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the Fund and (2) 67% or more of the shares of the Fund
present at the Meeting if more than 50% of the outstanding shares are present
at the Meeting in person or by proxy.
Methods of Tabulation. Shares represented by proxies that reflect
abstentions and "broker non-votes" (i.e., shares held by brokers or nominees
as to which (i) instructions have not been received from the beneficial owners
or the persons entitled to vote and (ii) the broker or nominee does not have
the discretionary voting power on a particular matter) will be counted as
shares that are present and entitled to vote on the matter for purposes of
determining the presence of a quorum. Votes cast by proxy or in person at the
Meeting will be counted by persons appointed as tellers for the Meeting.
The tellers will count the total number of votes cast "for" approval of the
proposal or proposals for purposes of determining whether sufficient
affirmative votes have been cast. With respect to any proposal, abstentions
and broker non-votes have the effect of a negative vote on the proposal.
Holding of Shares of the Trust by Management. On June 21, 2000, the Trustees
and officers of the Trust, as a group, beneficially owned less than one
percent of the outstanding shares of the Core Equity Fund and of the
outstanding shares of the Money Market Fund.
Other Business. The Trustees know of no other business to be brought before
the Meeting. However, if any other matters properly come before the Meeting,
it is the Trustees' intention that proxies which do not contain specific
restrictions to the
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contrary will be voted on such matters in accordance with the judgment of the
persons named in the enclosed form of Proxy.
Date for Receipt of Shareholders' Proposals for Subsequent Meeting of
Shareholders. The Trust's Agreement and Declaration of Trust does not provide
for regular annual meetings of Shareholders, and the Trust does not currently
intend to hold such meetings. In accordance with the regulations of the
Securities and Exchange Commission, in order to be eligible for inclusion in
the Fund's proxy statement for such meeting, a shareholder proposal must be
received a reasonable time before the Fund prints and mails its proxy
statement. Also, SEC rules permit management to exercise discretionary
authority to vote on shareholder proposals not included in the Fund's proxy
statement if the proponent has not notified the Fund of a proposal a
reasonable time before the Fund mails its proxy statement. All shareholder
proposals must also comply with other requirements of the SEC's rules and the
Trust's Agreement and Declaration of Trust.
Distributor, Administrator. Allmerica Investments, Inc. ("AII"), a wholly-
owned subsidiary of AFC, serves as the Distributor for the Trust. AII, AFIMS
and AFC are located at 440 Lincoln Street, Worcester, MA 01653. Investor Bank
& Trust Company, located at 200 Clarendon Street, 16th Floor, Boston, MA
02116, serves as the Trust's custodian and administrator.
PLEASE EXECUTE AND RETURN THE ENCLOSED PROXY PROMPTLY. A SELF-ADDRESSED,
POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
RICHARD M. REILLY
President
Worcester, MA
July 12, 2000
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Exhibit I
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
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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 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,
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<PAGE>
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, 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 payable by the Trust shall include, without
limitation; (i) interest and taxes;
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<PAGE>
(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.
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<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.
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
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<PAGE>
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% 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.
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<PAGE>
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 /s/ Richard M. Reilly
_________________________________ By: ______________________________________
Witness
ALLMERICA INVESTMENT TRUST
/s/ Julia Fletcher /s/ Thomas P. Cunningham
_________________________________ By: ______________________________________
Witness
7
<PAGE>
SCHEDULE A
SERIES OF SHARES OF THE TRUST
Effective as of October 1, 2000
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
Core Equity Fund
Equity Index Fund
Select Growth and Income Fund
Select Strategic Income Fund
Select Investment Grade Income Fund
Government Bond Fund
Money Market Fund
8
<PAGE>
SCHEDULE B
COMPENSATION
Effective as of October 1, 2000
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:
<TABLE>
<CAPTION>
Select Select Select Select
Emerging Aggressive Capital Value Select Select
Markets Growth Appreciation Opportunity International Growth
Fund Fund Fund Fund Equity Fund Fund
---------- ---------- ------------ ----------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Manager Fee............. 1.35% (1) (1) (2) (1) (2)
<CAPTION>
Select
Select Investment
Strategic Core Select Select Grade
Growth Equity Equity Index Growth and Strategic Income
Fund Fund Fund Income Fund Income Fund Fund
---------- ---------- ------------ ----------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Manager Fee............. 0.85% (3) (4) (1) (5) (5)
<CAPTION>
Government Money
Bond Market
Fund Fund
---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Manager Fee............. 0.50% (6)
</TABLE>
-----------
(1) The Manager's fees for the Select Aggressive Growth Fund, Select Capital
Appreciation Fund, Select International Equity 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 Capital Select Select
Aggressive Appreciation International Growth and
Assets Growth Fund Fund Equity Fund Income Fund
------ ----------- -------------- ------------- -----------
<S> <C> <C> <C> <C>
First $100 Million...... 1.00% 1.00% 1.00% 0.75%
$100 to $250 Million.... 0.90% 0.90% 0.90% 0.70%
$250 to $500 Million.... 0.80% 0.80% 0.85% 0.65%
$500 to $1 Billion...... 0.70% 0.70% 0.85% 0.65%
Over $1 Billion......... 0.65% 0.65% 0.85% 0.65%
</TABLE>
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<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 the Fund, is based on the following schedule:
<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 fee for the Core Equity Fund, computed daily at an annual
rate based on the average daily net assets of the Fund, is based on the
following schedule:
<TABLE>
<CAPTION>
Core Equity
Assets Fund
------ -----------
<S> <C>
First $250 Million............................................... 0.60%
Next $250 Million................................................ 0.55%
Next $250 Million................................................ 0.50%
Over $750 Million................................................ 0.45%
</TABLE>
(4) The Manager's fee for the Equity Index Fund, computed daily at an annual
rate based on the average daily net assets of the Fund, are based on the
following schedule:
<TABLE>
<CAPTION>
Equity Index
Assets Fund
------ ------------
<S> <C>
First $50 Million............................................... 0.35%
Next $200 Million............................................... 0.30%
Over $250 Million............................................... 0.25%
</TABLE>
(5) The Manager's fee for the Select Strategic Income Fund and Select
Investment Grade Income Fund, computed daily at an annual rate based on
the average daily net assets of the Fund, are based on the following
schedule:
<TABLE>
<CAPTION>
Select
Select Strategic Investment Grade
Assets Income 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>
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<PAGE>
(6) Manager's fee for the Money Market Fund, computed daily at an annual rate
based on the average daily net assets of the Fund, are based on the
following schedule:
<TABLE>
<CAPTION>
Money Market
Assets Fund
------ ------------
<S> <C>
First $100 Million.............................................. 0.35%
Next $400 Million............................................... 0.30%
Next $250 Million............................................... 0.25%
Over $750 Million............................................... 0.20%
</TABLE>
11
<PAGE>
EXHIBIT A
FORM OF
SUB-ADVISER AGREEMENT
SUB-ADVISER AGREEMENT executed as of , 1998 between Allmerica Financial
Investment Management Services, Inc. (the "Manager") and (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 (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 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-Adviser
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<PAGE>
which may include brokers or dealers affiliated with the Sub-Adviser. In the
selection of such brokers or dealers and the placing of such orders, the Sub-
Adviser always shall seek best execution (except to the extent permitted by
the next sentence hereof), which is to place portfolio transactions where the
Fund can obtain the most favorable combination of price and execution services
in particular transactions or provided on a continuing basis by a broker or
dealer, and to deal directly with a principal market maker in connection with
over-the-counter transactions, except when it is believed that best execution
is obtainable elsewhere. Subject to such policies as the Trustees may
determine, the Sub-Adviser shall not be deemed to have acted unlawfully or to
have breached any duty created by this Agreement or otherwise solely by reason
of its having caused the Trust to pay a broker or dealer that provides
brokerage and research services an amount of commission for effecting a
portfolio investment transaction in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction, if the
Sub-Adviser determines in good faith that such excess amount of commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer, viewed in terms of either that particular
transaction or the overall responsibilities of the Sub-Adviser and its
affiliates with respect to the Trust and to other clients of the Sub-Adviser
as to which Sub- Adviser or any affiliate of the Sub-Adviser exercises
investment discretion.
2. OTHER AGREEMENTS
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, partner, director, officer or
employee of, or be otherwise interested in, the Sub-Adviser, and in any person
controlled by or under common control with the Sub-Adviser, and that the Sub-
Adviser and any person controlled by or under common control with the Sub-
Adviser may have an interest in the Trust. It is also understood that the Sub-
Adviser and persons controlled by or under common control with the Sub-Adviser
have and may have advisory, management service or other contracts with other
organizations and persons, and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE MANAGER TO THE SUB-ADVISER
The Manager will pay to the Sub-Adviser as compensation for the Sub-
Adviser's services rendered a fee, determined as described in Schedule A which
is attached hereto and made a part hereof. Such fee shall be paid by the
Manager and not by the Trust.
4. AMENDMENTS OF THIS AGREEMENT
This Agreement (including Schedule A attached hereto) shall not be amended
as to any Fund unless such amendment is approved at a meeting by the
affirmative vote
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<PAGE>
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:
(a) Unless terminated as herein provided, this Agreement shall remain in
full force and effect through 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 " " or " " 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
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<PAGE>
present (in person or by proxy) and entitled to vote at such meeting, if the
holders of more than 50% of the outstanding shares of the Fund entitled to
vote at such meeting are present in person or by proxy, or (b) of the holders
of more than 50% of the outstanding shares of the Fund entitled to vote at
such meeting, whichever is less.
For the purposes of this Agreement, the terms "control", "interested person"
and "assignment" shall have their respective meanings defined in the 1940 Act
and rules and regulations thereunder, subject, however, to such exemptions as
may be granted by the SEC under said Act; the term "specifically approve at
least annually" shall be construed in a manner consistent with the 1940 Act
and the rules and regulations thereunder; and the term "brokerage and research
services" shall have the meaning given in the Securities Exchange Act of 1934
and the rules and regulations thereunder.
7. 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.
15
<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 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: ____________________________________________
(NAME OF SUB-ADVISER)
By: _____________________________________________
Its: ____________________________________________
Accepted and Agreed to as of the day and year first above written:
ALLMERICA INVESTMENT TRUST
By: _____________________________________________
Its: ____________________________________________
16
<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:
<TABLE>
<CAPTION>
Net
Assets Fee Rate
------ --------
<S> <C>
</TABLE>
The average daily net assets of the Fund shall be determined by taking an
average of all of the determinations of net asset 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.
17
<PAGE>
ALLMERICA INVESTMENT TRUST
PROXY
CORE EQUITY FUND
MONEY MARKET FUND
(Two Separate Series of Allmerica Investment Trust)
This Proxy is solicited on behalf of the Board of Trustees of the Trust.
The undersigned hereby appoints Richard M. Reilly, Paul T. Kane and George
M. Boyd, and each of them, attorneys and proxies of the undersigned, with full
power of substitution, and does hereby request that the votes attributable to
all of the undersigned's shares be cast as directed, with all powers the
undersigned would possess if personally present, at the Special Meeting of
Shareholders of the Core Equity Fund and Money Market Fund of Allmerica
Investment Trust to be held at 440 Lincoln Street, Worcester, Massachusetts
01653, on Wednesday, August 16, 2000 at 10:00 a.m., local time, and at any
adjournment thereof.
Dated____________________, 2000
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE.
Please sign exactly as the name appears hereon.
When signing as attorney, executor, administrator,
trustee or guardian, please give full title as
such. If a corporation, please sign in full
corporate name by president or other authorized
officer. If a partnership, please sign in
partnership name by authorized person. If joint
owners, each owner should sign.
Note: The undersigned hereby acknowledges receipt
of the Notice of Special Meeting and Proxy
Statement, and revokes any Proxy heretofore given
with respect to the votes covered by this Proxy.
__________________________________________________
__________________________________________________
Signature(s)
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE SHAREHOLDER. IF NO DIRECTION IS MADE, THE PROXY WILL BE VOTED "FOR" ALL
PROPOSALS. IF A PROXY IS NOT RECEIVED FROM A PARTICULAR SHAREHOLDER, EXCEPT
WHEN OTHERWISE PERMITTED BY APPLICABLE LAW, THEN THE VOTES ATTRIBUTABLE TO HIS
OR HER INTEREST WILL BE ALLOCATED IN THE SAME RATIO AS VOTES FOR WHICH
INSTRUCTIONS HAVE BEEN RECEIVED. THE MAILING DATE OF THIS PROXY IS ON OR ABOUT
JULY 12, 2000.
Please vote by filling in the appropriate box below.
<TABLE>
<CAPTION>
THE TRUSTEES RECOMMEND VOTING "FOR" THE PROPOSAL. FOR AGAINST ABSTAIN
<S> <C> <C> <C>
1. (i) Proposal to approve an Amendment to the Management [_] [_] [_]
Agreement between Allmerica Financial Investment Management Services,
Inc. and the Trust relating to the Core Equity Fund. (Separate vote by
shareholders of the Core Equity Fund.)
(ii) Proposal to approve an Amendment to the Management [_] [_] [_]
Agreement between Allmerica Financial Investment Management Services,
Inc. and the Trust relating to the Money Market Fund. (Separate vote by
shareholders of the Money Market Fund.)
2. In their discretion, the named proxies are authorized to vote on
such other matters as may properly come before the Meeting,
or any adjournment thereof.
</TABLE>
BE SURE TO VOTE, AND SIGN AND DATE THIS PROXY ON REVERSE SIDE.
<PAGE>
[LOGO OF ALLMERICA]
July 12, 2000
Dear Valued Client:
The enclosed proxy materials relate to a Special Meeting of Shareholders of
the Core Equity Fund and Money Market Fund (the "Funds"), two separate series
of Allmerica Investment Trust (the "Trust"), to be held on August 16, 2000 at
10:00 a.m., local time, here in our offices at 440 Lincoln Street, Worcester,
Massachusetts 01653 (the "Meeting").
At the Meeting, Shareholders will be asked to approve an Amendment (the
"Amendment") to the Management Agreement (the "Management Agreement") between
Allmerica Financial Investment Management Services, Inc. ("AFIMS"), the
Manager of the Funds, and the Trust dated April 16, 1998 relating to the
management fee schedules for the Funds. Following an intensive review process,
your Trustees voted to approve an Amendment to the Management Agreement to
increase the management fees paid by the Core Equity Fund and the Money Market
Fund to AFIMS.
Except for the revised fee schedules in the Amendment with respect to the
Funds, the Management Agreement, as amended, would be the same in all
substantive respects as the Management Agreement presently in effect. At
current net asset levels, the effective management fee rate would increase
from 0.421% to 0.521% for the Core Equity Fund and from 0.245% to 0.313% for
the Money Market Fund. The Trustees believe the proposed fee increases are
warranted in light of comparative fee information, the performance of the two
Funds, AFIMS' expenses and profitability in managing the Funds and the quality
and scope of services provided by AFIMS to the Funds. In reviewing the
management fees currently paid by the Core Equity Fund and Money Market Fund,
the Trustees considered the management fees paid by comparable funds available
to investors. The Trustees concluded that the current management fee rates
paid by these two Funds were significantly below industry averages for similar
funds. If approved by Shareholders, the management fees paid by the Trust to
AFIMS with respect to the Core Equity Fund and Money Market Fund would still
remain below the industry averages for comparable funds.
Although the Trustees would like very much to have you attend the Meeting,
they realize that this is not always possible. Whether or not you plan to be
present at the Meeting, YOUR VOTE IS NEEDED. PLEASE COMPLETE, SIGN AND RETURN
THE ENCLOSED PROXY CARD PROMPTLY IN THE POSTAGE-PAID ENVELOPE PROVIDED.
Your Trustees look forward to seeing you at the Meeting or receiving your
proxy so your shares may be voted at the Meeting.
Sincerely yours,
/s/ RICAHRD M. REILLY
Richard M. Reilly
President
SHAREHOLDERS ARE URGED TO SIGN AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED
ENVELOPE SO AS TO BE REPRESENTED AT THE MEETING.
