SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(C) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
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[ ] Definitive Information Statement
Allmerica Investment Trust
(Name of Registrant as Specified In Its Charter)
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ALLMERICA INVESTMENT TRUST:
SELECT AGGRESSIVE GROWTH FUND
440 LINCOLN STREET
WORCESTER, MA 01653
INFORMATION STATEMENT
On May 14, 2001, the Board of Trustees of Allmerica Investment Trust
(the "Trust") approved (1) separate Sub-Adviser Agreements (the "New Sub-Adviser
Agreements") for the Select Aggressive Growth Fund (the "Fund") of the Trust
between Allmerica Financial Investment Management Services, Inc. ("AFIMS"), the
Trust's investment manager, and Massachusetts Financial Services Company ("MFS")
and Jennison Associates LLC ("Jennison"), respectively, the Fund's Sub-Advisers,
which became effective on June 1, 2001, and (2) new principal investment
strategies for the Fund. The New Sub-Adviser Agreements are the same in all
substantive respects to the previous Sub-Adviser Agreement (the "Previous
Sub-Adviser Agreement"), dated January 31, 2001, in effect between AFIMS and
Nicholas-Applegate Capital Management, L.P. ("Nicholas-Applegate"), except that
the sub-advisory fees which AFIMS will pay MFS and Jennison differ from the
sub-advisory fee structure in the Previous Sub-Adviser Agreement and the
effective date and termination dates are different. There will be no change in
advisory fees paid by the Fund to AFIMS. AFIMS will pay MFS' and Jennison's
sub-adviser fees.
AFIMS manages the business affairs of the Fund pursuant to a Management
Agreement (the "Management Agreement") dated April 16, 1998 between the Trust
and AFIMS. The Management Agreement provides that, subject to the requirements
of the Investment Company Act of 1940 (the "1940 Act") and the rules and
regulations thereunder, AFIMS at its expense may select and contract with a
Sub-Adviser or Sub-Advisers to manage the investments of one or more of the
Funds in the Trust. AFIMS has selected MFS and Jennison to manage the
investments of the Fund and such selection was approved by the Board of Trustees
of the Trust at its May 14, 2001 meeting. MFS and Jennison initially each will
manage approximately one-half of the Fund assets. Thereafter, AFIMS will
allocate the Fund's assets between the two Sub-Advisers on a basis determined to
be in the best interests of Shareholders.
Under an order received from the Securities and Exchange Commission,
the Trust and AFIMS are permitted to enter into and amend sub-advisory
agreements without receiving shareholder approval and are granted relief from
certain disclosure requirements regarding advisory fees paid to Sub-Advisers.
The Trustees of the Trust must approve such sub-advisory agreements, and the
Fund must provide specified information to Shareholders within 90 days of the
hiring of any new sub-adviser or the retention of a sub-adviser whose ownership
has changed significantly. This Information Statement is being supplied to
Shareholders to fulfill such information requirement and is being mailed on or
about July ___, 2001.
NO SHAREHOLDER VOTE WILL BE TAKEN WITH RESPECT TO THE MATTER DESCRIBED
IN THIS INFORMATION STATEMENT. WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND US A PROXY.
Background. Prior to the appointment of MFS and Jennison as
Sub-Advisers of the Fund, Nicholas-Applegate served as Sub-Adviser of the Fund.
The decision to change Sub-Advisers was based primarily on Nicholas-Applegate's
performance on behalf of the Fund. Under investment performance criteria and
other standards established by AFIMS and BARRA RogersCasey, Inc. ("BARRA
RogersCasey"), a consultant retained by AFIMS, each Sub-Adviser of the Trust is
continuously monitored against relevant market indices and peer groups. Because
Nicholas-Applegate did not meet expectations for performance, AFIMS and BARRA
RogersCasey recommended that the Trustees terminate the Previous Sub-Adviser
Agreement and appoint MFS and Jennison as the new Sub-Advisers to the Fund. In
addition, the Trustees determined, based on the recommendation of AFIMS and
BARRA RogersCasey, that the Fund's assets could be managed more efficiently by
two Sub-Advisers and that it would be appropriate to change the strategy of the
Fund from one that focuses primarily on small- to medium-capitalization
companies to one that emphasizes companies of all sizes.
In the course of the selection process, AFIMS and BARRA RogersCasey
reviewed performance and background criteria, as well as written proposals and
in-person presentations by a number of investment advisory firms. In evaluating
the proposals, they considered, among other things, the nature and quality of
the services to be provided by each sub-adviser candidate, comparative data as
to each sub-adviser's investment performance, the experience and financial
condition of the sub-adviser and its affiliates, the level of sub-advisory fees
to be paid compared to industry averages, the sub-adviser's commitment to mutual
fund advisory activities and the quality of the sub-adviser's proposal
generally. As a part of the review process, AFIMS and BARRA RogersCasey met with
the Investment Operations Committee1 ("Committee") of the Board of Trustees and
discussed with the Committee the proposed selection of MFS and Jennison as the
new Sub-Advisers for the Fund. Both MFS and Jennison made formal presentations
to the Committee. Upon completion of the review process and following a
presentation to the Trustees by MFS and Jennison, the Trustees voted
unanimously, with the "non-interested" Trustees voting separately after
conferring with their independent counsel, to terminate the Previous Sub-Adviser
Agreement as of the close of business on May 31, 2001, to appoint MFS and
Jennison as the new Sub-Advisers to the Fund effective June 1, 2001 and to
approve the New Sub-Adviser Agreements. In evaluating the proposal, the Trustees
considered generally the same factors considered by AFIMS and BARRA RogersCasey.
The decision by the Trustees to change Sub-Advisers was based primarily on
Nicholas-Applegate's investment performance on behalf of the Fund. At the May
14, 2001 meeting, the Trustees were provided with financial and other
information about MFS and Jennison. At the meeting they were also provided with
performance information relating to MFS and Jennison and information about their
investment styles and current personnel. The Trustees considered the terms of
the New Sub-Adviser Agreements and the fact that they were substantially the
same as the Previous Sub-Adviser Agreement. The Trustees considered the fact
that there would be no change in the advisory fees paid by the Fund to AFIMS.
The Trustees concluded that entering into the New Sub-Adviser Agreements was in
the best interests of the Fund and its Shareholders.
INFORMATION REGARDING MASSACHUSETTS FINANCIAL SERVICES COMPANY AND
JENNISON ASSOCIATES LLC
MFS was founded in 1924 with the creation of Massachusetts Investors
Trust, which was America's first mutual fund. In 1982, MFS became a subsidiary
of Sun Life Assurance Company of Canada. Located at 500 Boylston Street, Boston,
MA 02116, MFS had approximately $133 billion in assets under management as of
March 31, 2001. Toni Y. Shimura will have responsibility for the day-to-day
management of MFS' portion of the Fund's investments. She joined MFS in 1987 as
a Research Analyst and currently is a portfolio manager of the managed sector
portfolios of MFS' mutual funds and variable annuities. She was named Vice
President in 1992, Portfolio Manager in 1993 and Senior Vice President in 1999.
Jennison, a wholly-owned subsidiary of the Prudential Insurance Company
of America, was founded in 1969 and is located at 466 Lexington Avenue, New
York, NY 10017. As of March 31, 2001, Jennison had approximately $81 billion in
assets under management. Kathleen McCarragher and Michael Del Balso will have
responsibility for the day-to-day management of Jennison's portion of the Fund's
investments. Ms. McCarragher, a Domestic Growth Equity Investment Strategist and
Executive Vice President, joined Jennison in 1998. Prior to joining Jennison she
was Managing Director and Director of Large Cap Growth Equities at Weiss, Peck &
Greer. She joined Weiss, Peck & Greer in 1992 after 10 years with State Street
Research & Management Company. Mr. Del Balso, a Director of Equity Research and
Executive Vice President, joined Jennison in 1972 after four years with White,
Weld & Company, where he was a Vice President.
All information about MFS and Jennison in this Information Statement
has been provided by MFS and Jennison, respectively.
Parent Companies of Massachusetts Financial Services Company and Jennison
Associates LLC
The tables below list the names, addresses and ownership percentages of
all parent companies of MFS and Jennison.
MFS
Name Address
Sun Life Financial Services of Canada, Inc. 225 King Street West
(a publicly traded company) Toronto, Ontario, Canada M5V3C5
100% owner of Sun Life Assurance Company
of Canada
Sun Life Assurance Company of Canada 225 King Street West
Toronto, Ontario, Canada M5V3C5
100% owner of Sun Life Assurance Company
of Canada - US Operations Holdings, Inc.
Sun Life Assurance Company of Canada - One Sun Life Executive Park
US Operations Holdings, Inc. Wellesley Hills, MA 02481
99.7% owner of Sun Life of Canada (US) Financial
Services Holdings, Inc.
Sun Life of Canada (US) Financial Services One Copley Place, Suite 200
Holdings, Inc. Boston, MA 02116
83.8% owner of Massachusetts Financial
Services Company (16.2% owned by
employees of Massachusetts Financial Services
Company)
JENNISON
Name Address
Prudential Insurance Company of America 751 Broad Street
Newark, NJ 07102
Jennison is an indirect, wholly-owned subsidiary of
the Prudential Insurance Company of America
(a mutual insurance company)
100% owner of Prudential Asset Management Holding
Company
Prudential Asset Management Holding Company
751 Broad Street
Jennison is an indirect, wholly-owned subsidiary of Newark, NJ 07102
Prudential Asset Management Holding Company
100% owner of Prudential Investment Management, Inc.
Prudential Investment Management, Inc.
751 Broad Street
Jennison is a direct, wholly-owned subsidiary of Newark, NJ 07102
Prudential Investment Management, Inc.
100% owner of Jennison Associates LLC
Principal Executive Officers and Directors of Massachusetts Financial Services
Company and Jennison Associates LLC
The tables below list the individuals who serve as principal executive
officers and directors of MFS and Jennison. The address for MFS personnel is 500
Boylston Street, Boston, MA 02116 and for Jennison's personnel is 466 Lexington
Avenue, New York, NY 10017. None serves as an officer or Trustee of the Trust.
MFS
Name Principal Occupation
James C. Baillie Director
John W. Ballen President, Chief Investment Officer and Director
Joan S. Batchelder Senior Vice President, Chief Fixed Income Officer and
Director of Fixed Income Portfolio Management
Thomas J. Cashman, Jr. Executive Vice President of MFS Investment Management,
Chairman of MFS Institutional Advisors, Inc. and Director
Joseph W. Dello Russo Executive Vice President, Chief Administrative Officer and Director
Kevin R. Parke Executive Vice President, Chief Equity Officer and Director
C. James Prieur Director
Arnold D. Scott Senior Executive Vice President, Director of Strategic Planning and
Director
William W. Scott, Jr. Executive Vice President of MFS Investment Management,
President of MFS Fund Distributors and Director
Jeffrey L. Shames Chairman, Chief Executive Officer and Director
Donald A. Stewart Director
William W. Stinson Director
JENNISON
Name Principal Occupation
Michael Anthony Del Balso Executive Vice President and Director
John Howard Hobbs Chief Executive Officer, Chairman and Director
Karen Elizabeth Kohler Chief Compliance Officer, Executive Vice President and Director
Kathleen Ann McCarragher Executive Vice President and Director
Spires Segalas President and Director
John Robert Strangfeld Director
Kevin Charles Uebelein Director
Bernard Bruce Winogard Director
Mary-Jane Flaherty Director
Philip Nicholas Russo Director
Victor Ying-Wing Sim Director
No arrangements or understandings made in connection with the New
Sub-Adviser Agreements exist between AFIMS, MFS and Jennison with respect to the
composition of the Boards of Directors of MFS and Jennison or the Board of
Trustees of the Trust or with respect to the selection or appointment of any
person to any office with any of them.
Other Funds Managed by Massachusetts Financial Services Company and Jennison
Associates LLC
MFS and Jennison serve as investment adviser or sub-adviser to other
investment company funds similar to the Select Aggressive Growth Fund.
Information about these funds appears in the following table.
MFS
Assets as of
Fund Portfolio 3/31/01 Fees
MFS Variable Insurance Trust MFS VIT Emerging Growth $1,655,209,474 Management fee: 0.75%
Series and a custodial offset of .01%
MFS Variable Insurance Trust MFS Emerging Growth Fund $20,600,000 Management fee: 0.70%
.04% waiver and a custodial offset
of .01%
MFS is the Investment Adviser of the MFS VIT Emerging Growth Series and the
Sub-Adviser of the MFS Emerging Growth Fund.
JENNISON
Assets as of
Fund Portfolio 3/31/01 Fees
Endeavor Series Trust Jennison Growth Portfolio $30,031,923 0.50% of the first $300 million of
average daily net assets: 0.40% of
average daily net assets over $300
million
EQ Advisors Trust EQ/Balanced Portfolio $230,417,765 0.35% of the average daily net assets
Harbor Fund Harbor Capital Appreciation $6,604,886,408 The fee shall be calculated based on
Fund the average actual net assets of all
assets managed by Jennison of the
Harbor Capital Appreciation Fund
and the Harbor Capital Group Trust:
0.75% on the first $10 million;
0.50% on the next $30 million;
0.35% on the next $25 million;
0.25% on the next $335 million;
0.22% on the next $600 million;
0.20% up to $5 billion; 0.25% on all
amounts in excess of $5 billion
Manufacturers Investment Trust Capital Appreciation Trust $9,262,649 0.40% of the daily net assets
managed up to $300 million, 0.35%
for amounts in excess of $300 million
Oppenheimer Select Managers Jennison Growth Fund $4,547,667 0.45% on the first $300 million;
0.40% for all amounts in excess of
$300 million
Prudential Diversified Funds* Prudential Diversified $12,553,282 0.30% on the first $300 million of
Conservative Growth Fund average daily net assets and 0.25%
thereafter
Prudential Diversified Funds* Prudential Diversified $36,880,292 0.30% on the first $300 million of
Moderate Growth Fund average daily net assets and 0.25%
thereafter
Prudential Diversified Funds* Prudential Diversified High $33,616,650 0.30% on the first $300 million of
Growth Fund average daily net assets and 0.25%
thereafter
SunAmerica Style Select Series, Large-Cap Growth Fund $29,980,840 0.30% on the first $300 million of
Inc.* average daily net assets and 0.25%
thereafter
The Hirtle Callaghan Trust* The Growth Equity Portfolio $175,509,542 0.30% of the average daily net asset
value
The Preferred Group of Mutual Preferred Large Cap Growth $559,561,803 The fee shall be calculated based on
Funds Fund the average quarterly net assets
The fee shall be calculated based on
the average quarterly net assets
0.75% on the first $10 million;
0.50% on the next $30 million;
0.35% on the next $25 million;
0.25% on the next $335 million;
0.22% on the next $600 million;
0.20% on the balance
The Prudential Investment Prudential Jennison Growth $4,870,413,381 0.30% on the first $300 million of
Portfolios, Inc. Fund average daily net assets and 0.25%
thereafter
The Prudential Series Fund, Inc. Prudential Jennison Portfolio $2,364,244,776 The fee shall be calculated based on
the average daily net assets 0.75%
on the first $10 million; 0.50% on
the next $30 million; 0.35% on the
next $25 million; 0.25% on the next
$335 million; 0.22% on the next $600
million; 0.20% on the balance
The Prudential Series Fund, Inc.* Diversified Conservative $28,675,085 0.30% on the first $300 million of
Growth Portfolio average daily net assets and 0.25%
thereafter
*indicates that the mutual fund is a multi-manager fund.
Jennison does not act as adviser to any of the mutual funds it manages. All
relationships are sub-adviser relationships.
Description of the Previous Sub-Adviser Agreement and the New Sub-Adviser
Agreements
The Fund began operations on August 21, 1992. The Previous Sub-Adviser
Agreement was last submitted and approved by the Shareholders of the Fund at a
Special Meeting on August 15, 1997 for the purpose of approving an amended fee
schedule. The Previous Sub-Adviser Agreement was last approved by the Trustees,
including the Trustees who are "non-interested," at a meeting of the Board of
Trustees on November 14, 2000. Except for different effective and termination
dates and the sub-advisory fee schedule, the terms of the New Sub-Adviser
Agreements are similar in all material respects to the terms of the Previous
Sub-Adviser Agreement.
For its services provided under the Previous Sub-Adviser Agreement,
Nicholas-Applegate was paid by AFIMS a fee computed daily and paid quarterly at
an annual rate based on the average daily net assets of the Fund as set forth
below:
Old Fees
Assets Rate
First $100 Million..................0.60%
Next $150 Million...................0.50%
Next $250 Million...................0.40%
Next $250 Million...................0.375%
Over $750 Million...................0.35%
During the fiscal year ended December 31, 2000, AFIMS paid
Nicholas-Applegate $4,363,074 for its sub-advisory services pursuant to the
Previous Sub-Adviser Agreement. If the new sub-adviser fees had been in effect
during the last fiscal year, MFS and Jennison would have received $2,152,114 and
$2,164,614, respectively, representing a total decrease of $46,346 or 1.06% from
the fees paid to Nicholas-Applegate. Based on the Fund's net assets at March 31,
2001 of approximately $641,851,839, the annual sub-adviser fees paid by AFIMS
would decrease from $2,881,944 to $2,654,908, a decrease of $227,036 or 7.88%.
For their services under the New Sub-Adviser Agreements, MFS and
Jennison will be paid by AFIMS a fee computed daily and paid quarterly at an
annual rate based on the average daily net assets of the Fund as set forth
below:
New Fees
MFS
Assets Rate
First $150 Million..................0.425%
Next $450 Million...................0.40%
Over $600 Million...................0.35%
JENNISON
Assets Rate
First $100 Million..................0.45%
Next $400 Million...................0.40%
Over $500 Million...................0.35%
In managing the Fund's portfolio, Nicholas-Applegate invested primarily
in stocks of small- and mid-cap companies, whereas under the Fund's new strategy
the Fund will invest in companies of all sizes. The Trustees believe that the
new Sub-Adviser fee rates should provide an effective means of compensating MFS
and Jennison for their advisory services.
The New Sub-Adviser Agreements provide that MFS and Jennison, as
Sub-Advisers, in return for their fees, will manage the investment and
reinvestment of assets of the Fund subject to the control and supervision of the
Board of Trustees and in accordance with the investment objective and policies
of the Fund set forth in the Trust's current registration statement and any
other policies established by the Board of Trustees or AFIMS. In this regard, it
is the responsibility of MFS and Jennison to make investment decisions for the
Fund and to place the Fund's purchase and sale orders for investment securities.
The New Sub-Adviser Agreement states that MFS and Jennison will provide at their
expense all necessary investment, management and administrative facilities
needed to carry out their duties under the New Sub-Adviser Agreements, but
excluding brokerage expenses and pricing and bookkeeping services.
The New Sub-Adviser Agreements will remain in full force and effect
through May 30, 2002 and shall continue in full force and effect for successive
periods of one year thereafter, but only so long as each such continuance is
specifically approved annually by the Board of Trustees, or by vote of the
holders of a majority of the Fund's outstanding voting securities, and by the
vote of a majority of the Trustees who are not "interested persons" of the
Trust, AFIMS, the Sub-Advisers, or any other Sub-Adviser to the Trust. The New
Sub-Adviser Agreements may be terminated at any time, without payment of any
penalty, by AFIMS, subject to the approval of the Trustees, by vote of the
Trustees, by vote of a majority of the outstanding voting securities of the
Fund, or by MFS or Jennison, as applicable, in each case on 60 days' written
notice. As required by the 1940 Act, each New Sub-Adviser Agreement will
automatically terminate, without the payment of any penalty, in the event of its
assignment. They also will terminate in the event that the Management Agreement
between the Trust and AFIMS shall have terminated for any reason.
The New Sub-Adviser Agreements provide that, in the absence of (i)
willful misfeasance, bad faith or gross negligence on the part of MFS and
Jennison, or (ii) reckless disregard by MFS or Jennison of their obligations and
duties under the respective New Sub-Adviser Agreement, they shall not be liable
to the Trust, AFIMS or to any shareholder or creditor of the Trust, for any
matter in connection with the performance of any of their services under the
respective New Sub-Adviser Agreements or for any good faith purchase or sale of
any investment made by them for the Trust.
In addition to approving the New Sub-Adviser Agreements, the Trustees
also approved new principal investment strategies for the Fund that reflect MFS'
and Jennison's investment management styles. The previous principal investment
strategies are stated in the Fund's current prospectuses dated May 1, 2001. The
new strategies, which became effective June 1, 2001, are included in a
Prospectus Supplement dated May 15, 2001 and are set forth below.
Principal Investment Strategies. To pursue the Fund's investment objective, the
Fund will take a multi-manager approach whereby two Sub-Advisers will
independently manage their own portions of the Fund's assets. Massachusetts
Financial Services Company looks for common stocks of companies that it believes
are early in their life cycle but which have the potential to become major
enterprises. The firm will also consider stocks of larger companies where
earnings growth is expected to accelerate because of special factors, such as
rejuvenated management, new products, changes in consumer demand or basic
changes in the economic environment. Jennison Associates LLC looks for common
stocks of predominantly mid- to large-sized companies that it believes are
poised to achieve and maintain superior earnings growth. Both Sub-Advisers will
use a fundamental bottom-up approach to selecting stocks for the Fund.
The Sub-Advisers initially each will manage approximately one-half of
the Fund's assets. Thereafter, the Manager will allocate the Fund's assets
between the two Sub-Advisers on a basis determined by the Manager to be in the
best interests of shareholders. This means that the portion of assets managed by
one Sub-Adviser could be significantly larger than that managed by the other and
that the difference in such portions could change from time to time.
Under normal circumstances, the Fund invests at least 65% of its assets
in common stocks, securities convertible into common stocks and warrants. The
Fund also may invest in debt securities and preferred stocks and up to 25% of
its assets in foreign securities (including investments in companies located or
primarily operating in countries with emerging markets, but not including its
investments in American Depositary Receipts or "ADR's").
OTHER INFORMATION
The shares of the Fund may be purchased only by separate accounts
("Separate Accounts") established by First Allmerica Financial Life Insurance
Company ("First Allmerica") or Allmerica Financial Life Insurance and Annuity
Company ("Allmerica Financial Life") for the purpose of funding variable annuity
contracts and variable life insurance policies issued by First Allmerica or
Allmerica Financial Life and by qualified pension and retirement plans. Both
First Allmerica and Allmerica Financial Life are wholly-owned subsidiaries of
Allmerica Financial Corporation ("AFC"), a publicly-traded Delaware holding
company for a group of affiliated companies, the largest of which is First
Allmerica, a life insurance company organized in Massachusetts in 1844. On
December 31, 2000, the Trustees and officers of the Trust, as a group,
beneficially owned less than 1% of the outstanding shares of the Fund.
Annual Report
The Trust will furnish, without charge, a copy of the most recent
Annual Report to the Shareholders of the Fund. Requests should be directed to
the Trust at 440 Lincoln Street, Worcester, Massachusetts 01653 or by calling
1-800-828-0540.
Broker Commissions
During the fiscal year ended December 31, 2000, no commissions were
paid to brokers affiliated with the Sub-Adviser of the Fund.
Distributor, Administrator
Allmerica Investments, Inc. ("AII"), a wholly-owned subsidiary of AFC,
serves as the Distributor for the Trust. AII, AFIMS and AFC are located at 440
Lincoln Street, Worcester, MA 01653. Investors Bank & Trust Company, 200
Clarendon Street, Boston, MA 02116, serves as the Trust's administrator, fund
accountant and custodian.
July ___, 2001
Mutfunds/2001/ MFS Jennison Info Statement.doc
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1 The Investment Operations Committee is composed of three Trustees who are
"non-interested" persons of the Trust, AFIMS or the Sub-Adviser or their
affiliates, two Trustees who are "interested" persons and one non-Trustee
participant. The Committee monitors investment adviser performance and
analyzes fund data.