<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:
[x] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 14a-12
The Fulcrum Trust
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(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:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] 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:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
<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 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.
<PAGE>
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 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
2
<PAGE>
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 17/th/ Street,
26/th/ 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.
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 17/th/ Street, 26/th/
Floor, Denver, Colorado 80202. None serves as an officer or Trustee of the
Trust.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
Name Position with Denver Investment Advisors Principal Occupation
or Bee & Associates
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
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.
3
<PAGE>
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 May 1, 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' 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.
4
<PAGE>
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
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.
5
<PAGE>
<TABLE>
<CAPTION>
Percentage Point Difference
Between Performance of the
International Growth Portfolio (net of
expenses including Basic Total
Fee and Incentive Fee) and Total Basic Incentive Advisory
Change in Selected Benchmark Index Fee (%) Fee (%) 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 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.
6
<PAGE>
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.
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
7
<PAGE>
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
8
<PAGE>
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 Incorporated (the
"Portfolio Manager"), a ________ corporation. This Agreement supercedes the
interim agreement among the parties dated May 1, 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.
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
<PAGE>
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 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
2
<PAGE>
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.
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
3
<PAGE>
(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
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;
4
<PAGE>
(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 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
5
<PAGE>
(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;
(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;
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;
6
<PAGE>
(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.
(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).
7
<PAGE>
<TABLE>
<CAPTION>
=========================================================================================================
Annual
Percentage Point Difference Between Performance of the Portfolio and Performance of Incentive Fee
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 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
8
<PAGE>
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 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
9
<PAGE>
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.
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,
10
<PAGE>
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.
11
<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
______________________ By:________________________________________
Witness
12
<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>
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 ___________________.
July 12, 2000 George J. Sullivan, Jr.
Chairman and President
1
