<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(Amendment No.__)
Filed by the Registrant [x]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] 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 Section 240.14a-11(c) or Section 14a-12
The Fulcrum 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)(1) 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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<PAGE>
THE FULCRUM TRUST
International Growth Portfolio
440 Lincoln Street
Worcester, Massachusetts 01653
----------------------
Notice of Special Meeting of
Shareholders of the International Growth Portfolio
of The Fulcrum Trust
August 18, 2000
----------------------
A special meeting of shareholders of the International Growth Portfolio of
The Fulcrum Trust will be held at 440 Lincoln Street, Worcester, MA 01653 on
August 18, 2000 at 10:00 a.m. (local time) for the following purposes:
1. To approve or disapprove a new Portfolio Manager Agreement under
which Bee & Associates, a division of Denver Investment Advisors LLC,
would serve as Portfolio Manager for the International Growth Portfolio.
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
By order of the Board of Trustees.
George M. Boyd
Secretary
The Fulcrum Trust
July 12, 2000
<PAGE>
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
OF
THE FULCRUM TRUST
INTERNATIONAL GROWTH PORTFOLIO
August 18, 2000
The Board of Trustees of The Fulcrum Trust (the "Trust") solicits your
voting instructions for a special meeting of shareholders of the International
Growth Portfolio, a separate series of the Trust, and at any adjournment of
the meeting. The special meeting will be held on August 18, 2000 at 10:00 a.m.
(local time) at the Trust's offices at 440 Lincoln Street, Worcester, MA 01653
for the purposes described in the accompanying Notice. The approximate mailing
date of this Proxy Statement and the voting instruction form is July 12, 2000.
The record date for determining persons entitled to vote at the special
meeting is June 28, 2000. Only those contract owners who as of the record date
had investment interests in the International Growth Portfolio are eligible to
vote in person or by proxy at the meeting. As of the record date, the
International Growth Portfolio had 207,148.714 shares outstanding. All shares
of the International Growth Portfolio are held by the Fulcrum Separate Account
of Allmerica Financial Life Insurance and Annuity Company and the Fulcrum
Separate Account of First Allmerica Financial Life Insurance Company
(together, the "Separate Accounts"). On June 15, 2000, the Trustees and
officers of the Trust owned less than 1% of the outstanding shares of the
International Growth Portfolio.
You are entitled to give instructions on how to vote the shares related to
your investment interests in the International Growth Portfolio. Each full
share has one vote, and each fractional share has a proportionate fractional
vote. If you submit a properly executed voting instruction form, but do not
include voting instructions, Allmerica Financial Life Insurance and Annuity
Company and First Allmerica Financial Life Insurance Company (together,
"Allmerica") will vote the shares "FOR" the proposal. Allmerica will vote
shares for which it does not receive properly executed instruction forms in
the same proportion as it votes shares for which it does receive properly
executed instruction forms.
In order for your voting instructions to be effective, the Trust must
receive them by the close of business on August 14, 2000. You may revoke your
voting instructions any time before that date by providing written notice to
the Secretary of the Trust at 440 Lincoln Street, Worcester, Massachusetts
01653. The instruction form will not be voted if you are present at the
meeting and elect to vote in person. Attendance at the meeting alone will not
serve to revoke the voting instructions. Allmerica may vote in
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its discretion with respect to other matters not known to the Board of
Trustees that may be presented at the meeting. This solicitation is being made
by mail, but it may also be made by facsimile, telephone or personal
interview. Bee & Associates ("Bee & Associates"), a division of Denver
Investment Advisors LLC ("Denver Investment Advisors"), Portfolio Manager of
the International Growth Portfolio, will bear the costs of this solicitation
and the special meeting.
The Trust will furnish you, upon request and without charge, a copy of the
Trust's most recent annual report and semi-annual report to shareholders.
Please write to the Trust at 440 Lincoln Street, Worcester, Massachusetts
01653, or call (800) 917-1909 to request a copy.
PROPOSAL
1. APPROVAL OR DISAPPROVAL OF A NEW PORTFOLIO MANAGER AGREEMENT UNDER WHICH
BEE & ASSOCIATES, A DIVISION OF DENVER INVESTMENT ADVISORS LLC, WOULD
SERVE AS PORTFOLIO MANAGER FOR THE INTERNATIONAL GROWTH PORTFOLIO
Background
Bee & Associates is the successor to Bee & Associates Incorporated, which
served as Portfolio Manager of the International Growth Portfolio from March
26, 1996, the date the Portfolio commenced operations, to April 28, 2000, when
the firm was acquired by Denver Investment Advisors. The federal securities
laws require that when there are certain changes in ownership of a mutual
fund's investment adviser or portfolio manager, the fund's agreement with the
portfolio manager automatically ends. If the mutual fund wants the portfolio
manager to continue to provide investment advisory services, the fund and the
portfolio manager must enter into a new agreement. This federal securities law
requirement was triggered by the acquisition of Bee & Associates Incorporated
by Denver Investment Advisors. Therefore, the International Growth Portfolio's
original Portfolio Manager Agreement with Bee & Associates Incorporated (the
"Old Agreement") ended April 28, 2000. Since that time Bee & Associates has
been allowed under federal regulations to continue serving on a temporary
basis as Portfolio Manager of the International Growth Portfolio under an
Interim Portfolio Manager Agreement (the "Interim Agreement").
At a special Board Meeting on April 26, 2000, the Trustees of the Trust
unanimously approved a new Portfolio Manager Agreement (the "New Agreement")
among Bee & Associates, the Trust and Allmerica Financial Investment
Management Services, Inc. ("AFIMS"), 440 Lincoln Street, Worcester, MA 01653,
the overall Manager of the Trust, subject to shareholder approval. The
Trustees of the Trust
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recommend that you vote to approve the New Agreement. The New Agreement is
substantially the same as the Old Agreement.
Board Consideration
At the April 26, 2000 Meeting, the Trustees were provided with materials
about both Bee & Associates and Denver Investment Associates, their investment
philosophy, current personnel and other clients. The Board considered the fact
that Bee & Associates' performance record had improved in 2000 and 1999
compared to 1998. The Trustees noted that Bee & Associates had given
assurances that the firm would continue to provide the same level of advisory
services and use the same investment strategies. It was noted that Denver
Investment Advisors would provide Bee & Associates with additional research
support and other resources. The Board considered the terms of the New
Agreement and the fact that it was substantially the same as the Old
Agreement. The Trustees also considered the fact that the New Agreement had
the same performance-based fee structure as under the Old Agreement. At a
regular Board Meeting on June 14, 2000, a representative from Bee & Associates
made a presentation to the Trustees regarding the acquisition of Bee &
Associates by Denver Investment Advisors. The Trustees concluded that entering
into the New Agreement with Bee & Associates was in the best interest of the
Portfolio and its investors. Accordingly, the Board voted unanimously to
approve the New Agreement.
INFORMATION ABOUT BEE & ASSOCIATES AND DENVER INVESTMENT ADVISORS LLC
Bee & Associates was founded in 1989 and is located at 1225 17th Street,
26th Floor, Denver, Colorado 80202. The firm is registered as an investment
adviser with the Securities and Exchange Commission and provides global equity
expertise to foundations, endowments, retirement plan sponsors, mutual funds
and individuals. As of March 31, 2000, Bee & Associates managed over $475
million in assets. Bee & Associates has a value driven, bottom-up approach to
stock selection and portfolio construction. Emphasis is placed on finding
businesses with market capitalization under $1 billion that are inexpensive
relative to intrinsic value and have above average growth prospects. The firm
relies on in-house fundamental analysis of data supplied by its global network
of investment contacts. Bee & Associates operates as a division of Denver
Investment Advisors.
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The table below lists the individuals who serve as principal executive
officers and Management committee members of Denver Investment Advisors and
Bee & Associates. The address for each individual is 1225 17th Street, 26th
Floor, Denver, Colorado 80202. None serves as an officer or Trustee of the
Trust.
<TABLE>
<CAPTION>
Position with Denver Investment
Name Advisors or Bee & Associates Principal Occupation
---- ------------------------------------ ------------------------
<C> <C> <S>
Kenneth V. Penland..... Chairman, CEO, Executive Manager Chairman, CEO,
Executive Manager
Denver Investment
Advisors
Todger Anderson........ President, COO, Executive Manager President, COO,
Executive Manager Denver
Investment Advisors
Jeffrey D. Adams....... Vice President, Management Committee Vice President--Denver
Investment Advisors
Alex W. Lock........... Vice President, Management Committee Vice President--Denver
Investment Advisors
Charlotte T. Petersen.. Vice President, Management Committee Vice President--Denver
Investment Advisors
Edward N. McMillan..... Director Director--Bee &
Associates
Adam D. Schor.......... Chief Investment Officer Chief Investment
Officer--Bee &
Associates
Kevin Beck............. Investment Officer Investment Officer--Bee
& Associates
</TABLE>
Founded in 1958, Denver Investment Advisors is registered as an investment
adviser with the Securities and Exchange Commission and provides investment
management services to institutional and private investors worldwide. Located
at the same address noted above for Bee & Associates, Denver Investment
Advisors had more than $8.3 billion in assets under management as of March 31,
2000.
No arrangements or understandings exist between AFIMS and Bee & Associates
or Denver Investment Advisors with respect to the composition of the board of
directors of Denver Investment Advisors or of the Board of Trustees of the
Trust or with respect to the selection or appointment of any person to any
office with either of them. All information about Bee & Associates and Denver
Investment Advisors has been provided by Bee & Associates.
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INFORMATION ABOUT THE NEW PORTFOLIO MANAGER AGREEMENT
The Old Agreement was executed as of November 23, 1999. The Old Agreement
was last approved by the Trustees, including the Trustees who were "non-
interested", at a meeting of the Board of Trustees on September 15, 1999. The
Old Agreement was approved by a vote of the Portfolio's shareholders on
November 10, 1999.
The Interim Agreement was executed as of April 28, 2000. The Interim
Agreement was last approved by the Trustees, including the Trustees who were
"non-interested", at the April 26, 2000 Board meeting, to permit Bee &
Associates to serve as Portfolio Manager on a temporary basis as allowed by
federal regulation.
The New Agreement with Bee & Associates, which appears in full as attached
Exhibit A, is substantially identical to the Old Agreement. The description of
the New Agreement set forth in this statement is qualified in its entirety by
reference to Exhibit A.
The New Agreement provides generally that the Portfolio Manager will provide
research services and make decisions about the securities in which the
International Growth Portfolio will invest. The Portfolio Manager must make
investment decisions for the International Growth Portfolio consistent with
the Portfolio's investment objective and policies. The Portfolio Manager must
comply with applicable laws and regulations. The Portfolio Manager must also
provide information about Portfolio transactions to the Trust's custodian, and
must provide information and reports to the Board of Trustees. The New
Agreement specifies that the Portfolio Manager must pay its own expenses and
salaries and fees of any officer or trustee of the Trust who is an officer,
director, or employee of the Portfolio Manager. The Portfolio Manager does not
otherwise have responsibility for the Trust's or the Portfolio's expenses. The
New Agreement imposes liability on the Portfolio Manager for losses caused by
the Portfolio Manager's breach of fiduciary duty (as limited by certain
provisions of the federal securities laws); willful misfeasance, bad faith, or
gross negligence by the Portfolio Manager; or reckless disregard by the
Portfolio Manager of its obligations and duties under the agreement. The Trust
may not recover from the Portfolio Manager for losses arising from other
causes. The New Agreement will remain in force for two years from August 19,
2000 and then will continue in effect for successive periods of one year after
that, but only so long as its continuance is specifically approved annually by
the Board of Trustees, or by vote of the holders of a majority of the
Portfolio's outstanding voting securities, and by the vote of a majority of
the Trustees who are not "interested persons" of the Trust, AFIMS or the
Portfolio Manager, as defined under the Investment Company Act of 1940 (the
"1940 Act"). The New Agreement may be terminated at any time by vote of the
Trustees, or by vote of a majority of the outstanding voting securities of the
Portfolio, on 60 days'
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written notice, or by AFIMS or Bee & Associates, on 90 days' written notice.
As required by the 1940 Act, the New Agreement will automatically terminate in
the event of its assignment.
Advisory Fees. The fee structure of the New Agreement is the same as under
the Old Agreement. For the period beginning December 1, 1999 and ending
November 30, 2000, the New Agreement provides for the payment of an advisory
fee based on the lesser of two fee calculations, one using the new benchmark,
the Morgan Stanley EAFE Small Cap Index, and the other using the current
benchmark, the Morgan Stanley EAFE Index. The advisory fee schedule is
explained in more detail below.
AFIMS serves as the overall Manager of the Trust, including the
International Growth Portfolio, and Bee & Associates, as Portfolio Manager,
handles the day-to-day investment management of the International Growth
Portfolio. For these services, the Portfolio pays an overall management fee,
computed and accrued daily and paid monthly, based on its average daily net
assets. The overall fee varies based on the performance of the Portfolio
(after expenses) compared to that of the benchmark. The Portfolio Manager
receives 80% of the fee, and AFIMS receives the remaining 20%.
Performance-Based Fee. The International Growth Portfolio pays, at the end
of each month, a monthly advisory fee equal to a Basic Fee plus or minus an
Incentive Fee. (As explained below, the fee might be reduced if absolute
performance is negative.) The monthly Basic Fee equals one-twelfth of the
annual Basic Fee rate of 2.0% multiplied by average daily net assets over the
previous 12 months. The Incentive Fee rate ranges from -2.0% to +2.0% on an
annual basis, depending on a comparison of the Portfolio's performance
(reflecting a deduction of Portfolio expenses) and the performance of the
benchmark over the past 12 months. The monthly Incentive Fee, like the monthly
Basic Fee, is calculated by multiplying one-twelfth of the Incentive Fee rate
on an annual basis by the average daily net assets over the previous 12
months. Accordingly, the Total Fee could range from 0.0% to an annual rate of
4.0%, depending on performance.
Performance of both the Portfolio and the benchmark is calculated on a
rolling 12-month period (i.e., the previous 12 months, including the month for
which the fee is being calculated). The performance of the Portfolio is
calculated by first determining the change in the Portfolio's net asset value
per share during the period, assuming the reinvestment of distributions during
that period, and then expressing this amount as a percentage of the net asset
value per share at the beginning of the period. Net asset value per share is
calculated by dividing the value of the securities held by the Portfolio plus
any cash or other assets minus all liabilities including accrued advisory fees
and the other expenses, by the total number of shares outstanding at the time.
No Incentive Fee will be paid unless the Portfolio's performance exceeds the
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benchmark by at least 3 percentage points. The maximum fee will be paid if
performance is 7.5 percentage points higher than the benchmark. No fee will be
paid at all if performance is 3 percentage points lower than the benchmark.
The chart below further explains the Incentive Fee at various performance
levels.
The New Agreement provides that, for the period beginning December 1, 1999
and ending November 30, 2000 the advisory fee will equal the lesser of two
fees, one calculated using the current benchmark, the Morgan Stanley EAFE
Index, and the other calculated using the new benchmark, the Morgan Stanley
EAFE Small Cap Index. Beginning December 1, 2000, the fee will be calculated
using only the new benchmark.
<TABLE>
<CAPTION>
Percentage Point Difference Between
Performance of the International Growth
Portfolio
(net of expenses including Basic Fee and
Incentive Fee) Total Incentive Total
and Change in Selected Benchmark Index Basic Fee(%) Fee(%) Advisory Fee
---------------------------------------- ------------ --------- ------------
<S> <C> <C> <C>
+7.5 or greater........................... 2.0 2.0 4.0
+6.0 or greater, but less than +7.5....... 2.0 1.5 3.5
+4.5 or greater, but less than +6.0....... 2.0 1.0 3.0
+3.0 or greater, but less than +4.5....... 2.0 0.5 2.5
+1.5 or greater, but less than +3.0....... 2.0 0.0 2.0
0.0 or greater, but less than +1.5........ 2.0 -0.5 1.5
-1.5 or greater, but less than 0.0........ 2.0 -1.0 1.0
-3.0 or greater, but less than -1.5....... 2.0 -1.5 0.5
Less than -3.0............................ 2.0 -2.0 0.0
</TABLE>
Maximum Fee If Performance Is Negative. Notwithstanding the above schedule,
if the absolute performance of the Portfolio (after payment of all expenses,
including the Basic Fee and any Incentive Fee) is negative, the monthly
advisory fee will be the lesser of the fee calculated pursuant to the above
schedule or the alternative monthly advisory fee described below. Under
certain circumstances, the alternative monthly advisory fee would result in
the Portfolio paying either no advisory fee or a lower monthly advisory fee
than under the performance fee schedule above.
If the Portfolio's performance (after payment of all expenses including
advisory fees) is negative and does not exceed the benchmark by six percentage
points (on an annual basis), no monthly advisory fee will be paid. If the
Portfolio's performance (after payment of all expenses including advisory
fees) is negative and does not exceed the selected benchmark by 12 percentage
points but does exceed the benchmark by six percentage points (on an annual
basis), the alternate monthly advisory fee will be based on an annual rate of
1.0% of average daily net assets over the previous 12 months. If, on the other
hand, the performance of the Portfolio (after payment of all expenses
including advisory fees) is negative but exceeds the benchmark by 12
percentage points or more (on an annual basis), the alternative
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monthly advisory fee will be based on an annual rate of 2.0% of average daily
net assets over the previous 12 months.
Size of Fee. The Basic Fee payable by the International Growth Portfolio is
at a rate higher than the investment advisory fees paid by most other
comparable mutual funds. If the International Growth Portfolio outperforms the
Morgan Stanley EAFE Small Cap Index by three percentage points or more, the
advisory fee payable by the International Growth Portfolio may further exceed
those paid by other mutual funds. On the other hand, if the International
Growth Portfolio underperforms the Morgan Stanley EAFE Small Cap Index, the
advisory fee paid by the International Growth Portfolio may be less than those
paid by other mutual funds. If, during the applicable performance period, the
International Growth Portfolio underperforms the EAFE Small Cap Index by three
or more percentage points, the International Growth Portfolio will not pay any
advisory fee.
1999 Advisory Fees. During the fiscal year ended December 31, 1999, the
International Growth Portfolio accrued aggregate advisory fees of $35,057,
including $28,046 which was paid to Bee & Associates for its advisory services
to the Portfolio.
Required Vote
The proposal will be adopted if it is approved by the vote of a majority of
outstanding shares of the International Growth Portfolio. The 1940 Act defines
a majority of outstanding shares of a Portfolio as the lesser of (1) a vote of
67% or more of the Portfolio's shares whose holders are present or represented
by proxy at the meeting if the holders of more than 50% of all outstanding
Portfolio's shares are present in person or represented by proxy at the
meeting, or (2) a vote of more than 50% of all outstanding Portfolio shares.
The Board recommends that you vote FOR this proposal.
MISCELLANEOUS
Methods of Tabulation. Shares represented by voting instructions 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.
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Broker Commissions. During the fiscal year ended December 31, 1999, no
commissions were paid to brokers affiliated with Bee & Associates.
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,
voting instruction forms which do not contain specific restrictions to the
contrary will be voted on such matters in accordance with the judgment of
Allmerica.
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. However, the Trust may from time to time
schedule special meetings. In accordance with the regulations of the SEC, in
order to be eligible for inclusion in the Trust's proxy statement for such
meeting, a shareholder proposal must be received a reasonable time before the
Trust prints and mails its proxy statement. Also, SEC rules permit management
to exercise discretionary authority to vote on shareholder proposals not
included in the Trust's proxy statement if the proponent has not notified the
Trust 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.
Administrator and Independent Accountants. Investors Bank & Trust Company,
200 Clarendon Street, Boston, Massachusetts 02117, provides custody, transfer
agency, fund accounting and administration services to the Trust.
PricewaterhouseCoopers LLP and its predecessor have served as independent
accountants for the Trust since the Trust commenced operations in 1996.
Representatives of PricewaterhouseCoopers LLP are not expected to be present
at the meeting.
PLEASE EXECUTE AND RETURN THE ENCLOSED VOTING INSTRUCTION FORM PROMPTLY. A
SELF-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
George J. Sullivan, Jr.
Chairman and President
July 12, 2000
Worcester, MA
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EXHIBIT A
INTERNATIONAL GROWTH PORTFOLIO
PORTFOLIO MANAGER AGREEMENT
Agreement, made this day of , 2000, among The Fulcrum Trust (the
"Trust"), a Massachusetts business trust; Allmerica Financial Investment
Management Services, Inc. (the "Manager"), a Massachusetts corporation; and Bee
& Associates, a division of Denver Investment Advisors LLC (the "Portfolio
Manager"), a corporation. This Agreement supersedes the interim agreement among
the parties dated April 28, 2000.
WHEREAS, the Trust is a diversified, open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Manager and the Portfolio Manager are both registered as
investment advisers under the Investment Advisers Act of 1940; and
WHEREAS, the Trust is authorized to issue shares of beneficial interest in
separate portfolios with each such portfolio representing interests in a
separate portfolio of securities and other assets; and
WHEREAS, the Manager has entered into a management agreement with the Trust,
pursuant to which the Manager will provide, among other services, advice with
respect to the selection and monitoring of portfolio managers to handle the
day-to-day investment management of certain portfolios; and
WHEREAS, the Portfolio Manager currently handles the day-to-day investment
management of the International Growth Portfolio of the Trust (the
"Portfolio");
WHEREAS the Trust, the Manager and the Portfolio Manager desire that the
Portfolio Manager continue to handle the day-to-day investment management of
the Portfolio.
Therefore, the parties agree as follows:
1. Appointment. The Trust hereby appoints the Portfolio Manager to provide
investment advisory services with respect to the Portfolio for the period and
on the terms set forth in this Agreement, subject to the direction of the
Board of Trustees of the Trust (the "Board of Trustees"). The Portfolio
Manager accepts such appointment and agrees to render the services described
herein for the compensation provided in paragraph 13.
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2. Services of the Portfolio Manager.
(a) Subject to the supervision of the Board of Trustees, the Portfolio
Manager will provide day-to-day investment management of the Portfolio. The
Portfolio Manager will provide investment research and conduct a continuous
program of evaluation, investment, sales, and reinvestment of the Portfolio's
assets by determining the securities and other investments that shall be
purchased, entered into, sold, closed, or exchanged for the Portfolio, when
these transactions should be executed, and what portion of the assets of the
Portfolio should be held in the various securities and other investments in
which it may invest. The Portfolio Manager is hereby authorized to execute and
perform such services on behalf of the Portfolio. To the extent permitted by
the investment policies of the Portfolio, the Portfolio Manager shall make
decisions for the Portfolio as to foreign currency matters and make
determinations as to, and execute and perform, foreign currency exchange
contracts on behalf of the Portfolio. The Portfolio Manager will provide the
services under this Agreement in accordance with the Portfolio's investment
objective or objectives, policies, and restrictions as stated in the Trust's
registration statement under the Securities Act of 1933 and the 1940 Act as
filed with the Securities and Exchange Commission ("SEC") and amended from
time to time (the "Registration Statement").
(b) The Portfolio Manager will use reasonable efforts to manage the
Portfolio so that it will (1) qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code, (2) comply with the diversification
requirements of Section 817(h) of the Internal Revenue Code and regulations
issued thereunder, and (3) comply with any other rules and regulations
pertaining to investment vehicles underlying variable annuity or variable life
insurance policies. In managing the Portfolio in accordance with these
requirements, the Portfolio Manager shall be entitled to receive and act upon
advice of counsel to the Trust or counsel to the Manager.
(c) On occasions when the Portfolio Manager deems the purchase or sale of a
security to be in the best interest of the Portfolio as well as any other
investment advisory clients, the Portfolio Manager may, to the extent
permitted by applicable laws and regulations, including, but not limited to
Section 17(d) of the 1940 Act, but shall not be obligated to, aggregate the
securities to be so sold or purchased with those of its other clients where
such aggregation is not inconsistent with the policies set forth in the
Registration Statement. In such event, allocation of the securities so
purchased or sold, as well as the expenses incurred in the transaction, will
be made by the Portfolio Manager in a manner that is fair and equitable in the
judgment of the Portfolio Manager in the exercise of its fiduciary obligations
to the Trust and to such other clients.
(d) In connection with the purchase and sale of securities for the
Portfolio, the Portfolio Manager will arrange for the transmission to the
custodian for the Trust on a
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daily basis, such confirmation, trade tickets, and other documents and
information as may be reasonably necessary to enable the custodian to perform
its administrative and recordkeeping responsibilities with respect to the
Portfolio. With respect to portfolio securities to be purchased or sold
through the Depository Trust Company, the Portfolio Manager will arrange for
the automatic transmission of the confirmation of such trades to the Trust's
custodian. The Portfolio Manager will provide to the Manager copies of the
documents and information sent to the custodian and the Depository Trust
Company as requested by the Manager.
(e) The Portfolio Manager will assist the custodian or recordkeeping agent
for the Trust in determining, consistent with the procedures and policies
stated in the Registration Statement, the value of any portfolio securities or
other assets of the Portfolio for which the custodian or recordkeeping agent
seeks assistance or review from the Portfolio Manager. The Portfolio Manager
will monitor on a daily basis the determination by the custodian or
recordkeeping agent for the Trust the value of portfolio securities and other
assets of the Portfolio and the determination of net asset value of the
Portfolio.
(f) The Portfolio Manager shall regularly report to the Board of Trustees on
the investment program for the Portfolio, and will furnish the Board of
Trustees such periodic and special reports as the Board may reasonably
request.
(g) The Portfolio Manager shall make its officers and employees available to
the Board of Trustees, officers of the Trust, and officers of the Manager for
consultation and discussions regarding the investment program for the
Portfolio.
3. Broker-Dealer Selection. The Portfolio Manager is responsible for decisions
to buy and sell securities and other investments for the Portfolio, broker-
dealer selection, and negotiation of brokerage commission rates. The Portfolio
Manager's primary consideration in effecting a security transaction will be to
obtain the best execution for the Portfolio, taking into account the factors
specified in the Registration Statement. Subject to the Registration Statement
and such policies as the Board of Trustees may determine and consistent with
Section 28(e) of the Securities Exchange Act of 1934, the Portfolio Manager
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 Portfolio to pay a broker-dealer for effecting a portfolio investment
transaction in excess of the amount of commission another broker-dealer would
have charged for effecting that transaction, if the Portfolio Manager
determines in good faith that such amount of commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker-dealer, viewed in terms of either that particular transaction or the
Portfolio Manager's overall responsibilities with respect to the Portfolio and
to its other clients as to which it exercises investment discretion.
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<PAGE>
4. Employees. In rendering the services required under this Agreement, the
Portfolio Manager may, from time to time, employ such person or persons as it
believes necessary to assist it in carrying out its obligations under this
Agreement. The Portfolio Manager shall be responsible for making reasonable
inquiries and for reasonably ensuring that no employee of the Portfolio
Manager:
(a) has been convicted, in the last ten (10) years, of any felony or
misdemeanor arising out of conduct involving embezzlement, fraudulent
conversion, or misappropriation of funds or securities, or involving
violations of Sections 1341, 1342, or 1343 of Title 18, United States
Code; or
(b) has been found by any state regulatory authority, within the last
ten (10) years, to have violated or to have acknowledged violation of any
provision of any state insurance law involving fraud, deceit, or knowing
misrepresentation; or
(c) has been found by any federal or state regulatory authorities,
within the last ten (10) years, to have violated or to have acknowledged
violation of any provisions of federal or state securities laws involving
fraud, deceit, or knowing misrepresentation; or
(d) is ineligible by reason of Section 9 of the 1940 Act to serve as an
employee of an investment adviser to an investment company.
5. Conformity with Applicable Law. The Portfolio Manager, in the performance
of its duties and obligations under this Agreement, shall act in conformity
with the Registration Statement and with the instructions and directions of
the Board of Trustees and will conform to, and comply with, the requirements
of the 1940 Act and all other applicable federal and state laws and
regulations.
6. Exclusivity. The services of the Portfolio Manager under this Agreement
are deemed exclusive with respect to managing a registered investment company
(or portfolio thereof) (1) which serves as the underlying investment vehicle
for variable life insurance policies and/or variable annuity contracts and (2)
which pays its adviser(s) fees based on investment performance ("performance-
based fees"). As long as this Agreement is in effect, neither the Portfolio
Manager nor its affiliates may serve as an investment adviser to or investment
manager of a registered investment company (or portfolio thereof) (1) which
serves as the underlying investment vehicle for variable life insurance
policies and/or variable annuity contracts and (2) which pays performance-
based fees to some or all of its advisers. The services of the Portfolio
Manager under this Agreement are also deemed exclusive with respect to
managing a registered investment company (or portfolio thereof) (1) which
serves as the underlying investment vehicle for variable life insurance
policies and/or variable annuity contracts and (2) shares of which are
purchased by one or more of its advisers. As long as this Agreement is in
effect, neither the Portfolio Manager nor its affiliates
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<PAGE>
may serve as an investment adviser to or investment manager of a registered
investment company (or portfolio thereof) (1) which serves as the underlying
investment vehicle for variable life insurance policies and/or variable
annuity contracts and (2) shares of which are purchased by one or more of its
advisers. Notwithstanding the foregoing exclusivity, nothing in this Agreement
shall prevent the Portfolio Manager (or its affiliates) from engaging in the
following activities, provided that the Portfolio Manager's services to the
Portfolio are not impaired thereby: (1) serving as investment adviser to or
investment manager of a registered investment company (or portfolio thereof)
which does not serve as the underlying investment vehicle for variable life
insurance policies and/or variable annuity contracts; or (2) serving as
investment adviser to or investment manager of a registered investment company
(or portfolio thereof) which does not pay any of its advisers a performance-
based fee and shares of which are not purchased by one or more of its
advisers, whether or not it serves as the underlying investment vehicle for
variable life insurance policies and/or variable annuity contracts.
7. Documents. The Trust has delivered copies of each of the following
documents to the Portfolio Manager and will deliver to it all future
amendments and supplements thereto, if any:
(a) the Trust's Declaration of Trust and its by-laws;
(b) the Registration Statement; and
(c) the prospectus and statement of additional information of the Trust
as currently in effect and as amended and supplemented from time to time.
8. Records. The Portfolio Manager agrees to maintain and to preserve records
relating to the Trust as required by the 1940 Act. The Portfolio Manager
further agrees that all records which it maintains for the Trust are the
property of the Trust and it will promptly surrender any of such records upon
request.
9. Disclosure by Portfolio Manager. The Portfolio Manager will not disclose
or use any records or information obtained pursuant to this Agreement
(excluding investment research and investment advice) in any manner whatsoever
except as required to carry out its duties as investment adviser or in the
ordinary course of business in connection with placing orders for the purchase
and sale of securities, and will keep confidential any information obtained
pursuant to this Agreement, and disclose such information only if the Board of
Trustees has authorized such disclosure, or if such disclosure is expressly
required by applicable federal or state law or regulations or regulatory
authorities having the requisite authority.
10. Disclosure about Portfolio Manager. The Portfolio Manager has reviewed
the current version of the Trust's prospectus and statement of additional
information and represents and warrants that, with respect to the disclosure
relating to the Portfolio
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<PAGE>
Manager, such documents contain, as of the date hereof, no untrue statement of
any material fact and do not omit any statement of a material fact which was
required to be stated therein or necessary to make the statements contained
therein not misleading. The Portfolio Manager further represents and warrants
that it is a duly registered investment adviser under the Investment Advisers
Act of 1940 and a duly registered investment adviser in all states in which
the Portfolio Manager is required to be registered.
11. Compliance. The Portfolio Manager agrees that it shall immediately
notify the Manager and the Trust in the event that:
(a) the SEC has censured the Portfolio Manager; placed limitations upon
its activities, functions or operations; suspended or revoked its
registration as an investment adviser; or commenced proceedings or an
investigation that may result in any of these actions; or
(b) the Portfolio Manager has a reasonable basis for believing that the
Portfolio has ceased to qualify or might not qualify as a regulated
investment company under Subchapter M of the Internal Revenue Code; or
(c) the Portfolio Manager has a reasonable basis for believing that the
Portfolio has ceased to comply or might not comply with the
diversification provisions of Section 817(h) of the Internal Revenue Code
or the regulations thereunder; or
(d) the Portfolio Manager has become aware of a material fact that is
not contained in the Registration Statement or prospectus for the Trust,
or any amendment or supplement thereto, or that any statement contained
therein that has become untrue or misleading in any material respect.
12. Expenses. During the term of this Agreement, the Portfolio Manager will
pay all expenses incurred by it in connection with its activities under this
Agreement, including all rent and other expenses involved in providing office
space and equipment required by the Portfolio Manager and the salaries and
expenses of all personnel of the Portfolio Manager. The Portfolio Manager
further agrees to pay all salaries, fees and expenses of any officer or
trustee of the Trust who is an officer, director or employee of the Portfolio
Manager or any of its affiliates. Nothing in this Agreement shall require the
Portfolio Manager to bear the following expenses:
(a) Fees of the Manager;
(b) Charges for audits by the Trust's independent public accountants;
(c) Charges of the Trust's transfer agent, registrar, and/or dividend
disbursing agent;
(d) Charges of the Trust's custodian and/or accountant;
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<PAGE>
(e) Costs of obtaining quotations for calculating the value of each
Portfolio's net assets;
(f) Costs of maintaining the Trust's tax records;
(g) Salaries and other compensation of any of the Trust's executive
officers and employees, if any, who are not officers, directors, or
employees of the Portfolio Manager or any of its affiliates;
(h) Taxes levied against the Trust;
(i) Brokerage fees and commissions in connection with the purchase and
sale of portfolio securities for the Trust;
(j) Costs, including the interest expense, of borrowing by the Trust;
(k) Costs and/or fees incident to meetings of the Trust's shareholders,
the preparation and mailings of prospectuses, reports, proxy statements
and other communications by the Trust to its shareholders, the filing of
reports with regulatory bodies, the maintenance of the Trust's existence,
and the registration of shares with federal and state securities or
insurance authorities;
(l) The Trust's legal fees, including the legal fees related to the
registration and continued qualification of the Trust's shares for sale;
(m) Costs of printing stock certificates representing shares of the
Trust;
(n) Trustees' fees and expenses of Trustees who are not officers,
directors, or employees of the Portfolio Manager or any affiliates;
(o) Trust's pro rata portion of the fidelity bond required by Section
17(g) of the 1940 Act, or other insurance premiums;
(p) Membership dues for any association of which the Trust is a member;
(q) Extraordinary expenses of the Trust as may arise, including expenses
incurred in connection with litigation, proceedings, other claims against
the Trust (unless the Portfolio Manager is responsible for such expenses
under paragraph 14 of this Agreement), and the legal obligations of the
Trust to indemnify its trustees, officers, employees, shareholders,
distributors, and agents with respect to such claims; and
(r) Organizational and offering expenses of the Trust and, if
applicable, reimbursement (with interest) of underwriting discounts and
commissions.
13. Compensation.
(a) For the services provided and the expenses borne by the Portfolio
Manager pursuant to this Agreement, the Trust will pay the Portfolio Manager
80% of the advisory fee as determined by this Agreement. The Trust will pay
the other 20% to the Manager.
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<PAGE>
(b) The Portfolio will pay at the end of each month, an advisory fee (the
"Monthly Advisory Fee"). The Monthly Advisory Fee equals the Basic Fee (as
defined in paragraph 13(c) below) plus the Incentive Fee (as defined in
paragraph 13(d) below) and adjusted, if so required, by paragraph 13(g) or
paragraph 13(h) below.
(c) The Basic Fee equals one-twelfth of 2% multiplied by the Portfolio's
average daily net assets for the previous 12 months (including the month for
which the fee is being calculated).
(d) The Incentive Fee equals: (i) one-twelfth of the Annual Incentive Fee
set forth in the chart below based on the difference between the Performance
of the Portfolio and the Performance of the Benchmark, as those terms are
defined in paragraphs 13(e) and 13(f) below; (ii) multiplied by the
Portfolio's average daily net assets for the previous 12 months (including the
month for which the fee is being calculated).
<TABLE>
<CAPTION>
Percentage Point Difference Annual
Between Performance of the Incentive Fee
Portfolio and Performance of the Benchmark (%)
------------------------------------------ -------------
<S> <C>
+7.5 or greater................................................... 2.0%
+6.0 or greater, but less than +7.5............................... 1.5
+4.5 or greater, but less than +6.0............................... 1.0
+3.0 or greater, but less than +4.5............................... 0.5
+1.5 or greater, but less than +3.0............................... 0.0
0.0 or greater, but less than +1.5............................... -0.5
-1.5 or greater, but less than 0.0................................ -1.0
-3.0 or greater, but less than -1.5............................... -1.5
Less than -3.0.................................................... -2.0
</TABLE>
(e) The Performance of the Portfolio will be calculated by first determining
the change in the Portfolio's net asset value per share during the previous
twelve months (including the month for which the fee is being computed)
assuming the reinvestment of distributions during that period, and then
expressing this amount as a percentage of the net asset value per share at the
beginning of the period. Net asset value per share is calculated by dividing
the value of the securities held by the Portfolio plus any cash or other
assets minus all liabilities including accrued advisory fees and the other
expenses, by the total number of shares outstanding at the time. The
Performance of the Portfolios shall be calculated in accordance with SEC
rules.
(f) The Performance of the Benchmark will be calculated by first determining
the change in the level of the Benchmark during the previous twelve months
(including the month for which the fee is being computed) plus the value of
any cash dividends or distributions made by the companies whose securities
comprise the Benchmark accumulated to the end of the period, and then
expressing this amount as a percentage
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<PAGE>
of the Benchmark at the beginning of the period. The Performance of the
Benchmark shall be calculated in accordance with SEC rules. The Benchmark is
the Morgan Stanley EAFE Small Cap Index. If the Benchmark ceases to be
published, changes in any material respect or otherwise becomes impracticable
to use for purposes of the Incentive Fee, the Monthly Advisory Fee will equal
the Basic Fee (with no incentive adjustment) until such time as the Board of
Trustees approves a substitute Benchmark.
(g) Notwithstanding paragraphs 13(a)-13(f) above, if the Performance of a
Portfolio (minus payment of all expenses, including the Basic Fee and any
Incentive Fee) is negative and does not exceed the Performance of the
Benchmark by six percentage points, then the Monthly Advisory Fee will equal
zero. Notwithstanding paragraphs 13(a)-13(f) above, if the Performance of a
Portfolio (minus payment of all expenses, including the Basic Fee and any
Incentive Fee) is negative, exceeds the Performance of the Benchmark by six
percentage points, but does not exceed the Performance of the Benchmark by
twelve percentage points, then the Monthly Advisory Fee will not be greater
than one-twelfth of 1% of the Portfolio's average daily net assets for the
previous 12 months (including the month for which the fee is being
calculated). Notwithstanding paragraphs 13(a)-13(f) above, if the Performance
of a Portfolio (minus payment of all expenses, including the Basic Fee and any
Incentive Fee) is negative and exceeds the Performance of the Benchmark by
twelve percentage points, then the Monthly Advisory Fee will not be greater
than one-twelfth of 2% of the Portfolio's average daily net assets for the
previous 12 months (including the month for which the fee is being
calculated).
(h) Notwithstanding paragraphs 13(a)--13(g) above, for the period ending
November 30, 2000, the Monthly Advisory Fee will equal the lesser of the
Monthly Advisory Fee calculated pursuant to paragraphs 13(a)--13(g) above or
the Portfolio Manager Agreement dated October 12, 1995 as modified by a
Substitution Agreement dated February 11, 1998.
14. Liability and Indemnification. The Portfolio Manager, the Manager and
the Trust each may rely on information reasonably believed by it to be
accurate and reliable. The Portfolio Manager shall not be liable to the Trust
or its shareholders for any loss suffered by the Trust as the result of any
negligent act or error of judgment of the Portfolio Manager in connection with
the matters to which this Agreement relates, except a loss resulting from a
breach by the Portfolio Manager of its fiduciary duty with respect to the
receipt of compensation for services (in which case any award of damages shall
be limited to the period and the amount set forth in Section 36(b)(3) of the
1940 Act) or loss resulting from willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement. The Trust
shall indemnify the Portfolio Manager and hold it harmless from all cost,
damage and expense, including reasonable expenses for legal counsel, incurred
by the Portfolio Manager resulting
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<PAGE>
from actions for which it is relieved of responsibility by this paragraph. The
Portfolio Manager shall indemnify the Trust and hold it harmless from all
cost, damage and expense, including reasonable expenses for legal counsel,
incurred by the Trust resulting from (i) a breach by the Portfolio Manager of
its fiduciary duty with respect to compensation for services paid by the Trust
(in which case any award of damages shall be limited to the period and the
amount set forth in Section 36(b)(3) of the 1940 Act); (ii) willful
misfeasance, bad faith or gross negligence by the Portfolio Manager in the
performance of its duties under this Agreement; or (iii) reckless disregard by
the Portfolio Manager of its obligations and duties under this Agreement.
15. Continuation and Termination. This Agreement shall take effect on the
date first written above, and shall continue in effect, unless sooner
terminated as provided herein, for two years from such date and shall continue
from year to year thereafter so long as such continuance is specifically
approved at least annually (i) by the vote of a majority of the Board of
Trustees; or (ii) by vote of a majority of the outstanding voting shares of
the Portfolio; provided, further, in either event that continuance is also
approved by the vote of a majority of the Board of Trustees who are not
parties to this Agreement or "interested persons" (as defined in the 1940 Act)
of the Trust, the Manager or the Portfolio Manager cast in person at a meeting
called for the purpose of voting on such approval. This Agreement may be
terminated (i) by the Trust at any time, without the payment of any penalty,
by vote of a majority of the entire Board of Trustees or by a vote of a
majority of the outstanding voting shares of the Portfolio, on sixty (60)
days' written notice to the Manager and the Portfolio Manager, (ii) by the
Manager at any time, without the payment of any penalty, on ninety (90) days'
written notice to the Trust and the Portfolio Manager, or (iii) by the
Portfolio Manager at any time, without the payment of any penalty, on ninety
(90) days' written notice to the Trust and the Manager. This Agreement will
automatically and immediately terminate in the event of its "assignment" (as
defined in the 1940 Act).
16. Independent Contractor. The Portfolio Manager shall for all purposes
herein be deemed to be an independent contractor and shall, unless otherwise
expressly provided herein or authorized by the Board of Trustees from time to
time, have no authority to act for or represent the Trust in any way or
otherwise be deemed its agent.
17. Use of Name. It is understood that the words "Fulcrum Fund," "Fulcrum
Trust," any derivative thereof and any design associated with those words
(collectively, the "Words and Designs") are the valuable property of the
Manager, and that the Portfolio Manager shall have the right to use the Words
and Designs only with the approval of the Manager. Upon termination of this
Agreement, the Portfolio Manager shall promptly discontinue all use of the
Words and Designs.
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<PAGE>
18. Sales Literature. The Manager agrees to furnish to the Portfolio Manager
all sales literature which refers to the Portfolio Manager prior to use
thereof and not to use such sales literature if the Portfolio Manager
reasonably objects in writing five business days (or such other time as may be
mutually agreed) after receipt thereof. Sales literature may be furnished to
the Portfolio Manager by first class mail, overnight delivery service,
facsimile transmission equipment, or hand delivery.
19. Notice. Notices of any kind to be given to the Trust shall be in writing
and shall be duly given if sent by first class mail or delivered to the Trust
at 440 Lincoln Street, Worcester, Massachusetts, 01653, or at such other
address or to such individual as shall be specified by the Trust (with proper
notice to the Manager and the Portfolio Manager). Notices of any kind to be
given to the Manager shall be in writing and shall be duly given if sent by
first class mail or delivered to the Manager at 440 Lincoln Street, Worcester,
Massachusetts, 01653, or at such other address or to such individual as shall
be specified by the Manager (with proper notice to the Trust and the Portfolio
Manager). Notices of any kind to be given to the Portfolio Manager shall be in
writing and shall be duly given if sent by first class mail or delivered to
Bee & Associates, 370 17th Street, Suite 5150, Denver, Colorado 80202, or at
such other address or to such individual as shall be specified by the
Portfolio Manager (with proper notice to the Trust and the Manager).
20. Obligation. A copy of the Trust's Agreement and Declaration of Trust is
on file with the Secretary of the Commonwealth of Massachusetts. Notice is
hereby given that this Agreement has been executed on behalf of the Trust by a
trustee of the Trust in his or her capacity as trustee and not individually.
The obligations of this Agreement shall only be binding upon the assets and
property of the Trust and shall not be binding upon any trustee, officer, or
shareholder of the Trust individually.
21. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original.
22. Applicable law. This Agreement shall be governed by the laws of
Massachusetts, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Investment Advisers Act of 1940, or any
rules or order of the SEC thereunder.
23. Severability. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby and, to this extent, the provisions of
this Agreement shall be deemed to be severable.
24. Captions. The captions of this Agreement are included for convenience
only and in no way define or limit any of the provisions hereof or otherwise
affect their construction or effect.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below on the day and year first above
written.
The Fulcrum Trust
-------------------------------------- By: __________________________________
Witness
Allmerica Financial Investment
Management Services, Inc.
-------------------------------------- By: __________________________________
Witness
Bee & Associates, a division of
Denver Investment Advisors LLC
-------------------------------------- By: __________________________________
Witness
21
<PAGE>
Voting Instruction Form
For The Special Meeting Of Shareholders Of The Fulcrum Trust
August 18, 2000
INTERNATIONAL GROWTH PORTFOLIO
John Doe
123 Main Street
New York, NY 10001
Contract No: _________
Dear Contract Owner:
Allmerica Financial Life Insurance and Annuity Company and First Allmerica
Financial Life Insurance Company (together, "Allmerica") and the Board of
Trustees of The Fulcrum Trust (the "Trust") solicit your voting instructions and
recommend a vote "FOR" the Proposal below. Allmerica will vote the appropriate
number of The International Growth Portfolio shares pursuant to the instructions
you give. If you sign and return this instruction form but do not make a
choice, Allmerica will vote "FOR".
Allmerica - for the purpose of voting on the Proposal in the agenda set forth in
the Notice and Proxy Statement Concerning the Special Meeting of Shareholders of
The Fulcrum Trust at the special shareholder meeting to be held on August 18,
2000 or at any adjournment - is hereby instructed to vote The International
Growth Portfolio shares as to which I am entitled to give instructions as
follows:
PROPOSAL Approval of Portfolio Manager Agreement with Bee & Associates, a
division of Denver Investment Advisors LLC
FOR __
AGAINST __
ABSTAIN __
PLEASE MARK YOUR CHOICE LIKE THIS: X
SIGNATURE____________________DATE__________
SIGNATURE____________________DATE__________
Please sign your name as it appears on the top of this instruction card. If you
own a contract jointly, each owner should sign. If a contract is held in a
fiduciary capacity, the fiduciary should sign and indicate his or her fiduciary
capacity.
<PAGE>
[LOGO OF ALLMERICA]
Dear Contract Owner:
The Fulcrum Trust (the "Trust") will hold a special meeting of shareholders
on August 18, 2000.
The attached Notice and Proxy Statement concerning the special meeting
discuss the single proposal to be considered at the meeting--approval of a new
Portfolio Manager Agreement with Bee & Associates ("Bee & Associates"), a
division of Denver Investment Advisors LLC ("Denver Investment Advisors") as
Portfolio Manager of The International Growth Portfolio of the Trust. The
Board of Trustees of the Trust has approved the new Portfolio Manager
Agreement with Bee & Associates. The Board now submits the new Portfolio
Manager Agreement with Bee & Associates for your consideration and recommends
that you vote "FOR" approval of the agreement.
Because the proposal affects only The International Growth Portfolio, only
contract owners such as you whose contracts hold an interest in the
International Growth Portfolio will vote on the proposal. You are entitled to
provide instructions on how to vote the number of shares of the International
Growth Portfolio held as of the close of business on June 28, 2000.
Please take a few minutes to consider this matter and then exercise your
right to give your instructions by completing, dating and signing the enclosed
voting instruction form. Included is a self-addressed and postage-paid
envelope for your convenience.
If you have any questions about these materials, please contact your
financial adviser or Allmerica Financial at 1-800-917-1909.
George J. Sullivan, Jr.
Chairman and President
July 12, 2000
