SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(c) OF THE SECURITIES
EXCHANGE ACT OF 1934
(Amendment No.___)
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Allmerica Investment Trust
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ALLMERICA INVESTMENT TRUST
SELECT GROWTH FUND
440 LINCOLN STREET
WORCESTER, MA 01653
INFORMATION STATEMENT
On February 12, 2004, the Board of Trustees of Allmerica Investment Trust
(the "Trust") approved (1) a sub-advisory agreement (the "New Sub-Adviser
Agreement"), attached as an Appendix, for the Select Growth Fund series (the
"Fund") of the Trust between Allmerica Financial Investment Management Services,
Inc. ("AFIMS"), the Trust's investment manager, and GE Asset Management
Incorporated ("GEAM"), which became effective April 30, 2004, and (2) new
principal investment strategies for the portion of the Fund managed by GEAM. To
pursue its investment objective, the Fund uses a multi-manager approach whereby
two Sub-Advisers, Jennison Associates LLC ("Jennison") and GEAM, will manage
their own portions of the Fund's assets. The New Sub-Adviser Agreement is the
same in all substantive respects to the previous Sub-Adviser Agreement (the
"Previous Sub-Adviser Agreement"), dated August 5, 2003, in effect between AFIMS
and Putnam Investment Management, LLC ("Putnam"), except that, based on the
Fund's asset levels as of January 1, 2004, the sub-advisory fees that AFIMS will
pay GEAM under the New Sub-Adviser Agreement are lower than the sub-advisory fee
paid under the Previous Sub-Adviser Agreement and the effective date and
termination dates of the sub-adviser agreements are different. AFIMS will pay
Jennison's and GEAM's sub-adviser fees. AFIMS has voluntarily agreed to reduce
its management fee paid by the Fund by an amount that coincides with the benefit
it receives from the lower sub-adviser fee it is required to pay GEAM under the
New Sub-Adviser Agreement.
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, as amended (the "1940 Act") and the rules
and regulations thereunder, AFIMS at its expense may select and contract with a
sub-adviser or sub-advisers (each a "Sub-Adviser") to manage the investments of
one or more of the Funds in the Trust. AFIMS has selected Jennison and GEAM to
manage the investments of the Fund and such selection was approved by the Board
of Trustees of the Trust most recently at its May 13, 2004 meeting with respect
to Jennison and at its February 12, 2004 meeting with respect to GEAM. Each of
Jennison and GEAM initially will manage approximately one-half of the Fund's
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 the Fund's
shareholders.
Under an order received from the U.S. Securities and Exchange Commission,
the Trust, on behalf of the Fund, and AFIMS are permitted to enter into and
amend sub-advisory agreements without receiving shareholder approval. 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 May 31, 2004.
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 GEAM as a Sub-Adviser of the Fund,
Putnam and Jennison served as co-Sub-Advisers of the Fund. AFIMS and CRA
RogersCasey, Inc. ("CRA RogersCasey), a consultant retained by AFIMS to assist
it in evaluating the performance of the sub-advisers of the Trust, recommended
that the Trustees of the Fund terminate the Previous Sub-Adviser Agreement with
Putnam and enter into the New Sub-Adviser Agreement with GEAM. The decision to
replace Putnam with GEAM as a Sub-Adviser of the Fund was based primarily on
Putnam's underperformance in managing its allocated portion of the Fund's assets
and certain personnel changes to the management team assigned by Putnam to
manage the Fund.
In the course of the selection process, AFIMS and CRA RogersCasey reviewed
performance and background criteria relating to a number of investment advisory
firms, as well as written proposals and in-person presentations by several
investment advisory firms. 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 candidate's investment performance, the
experience and financial condition of the sub-adviser candidate and its
affiliates, the level of sub-advisory fees to be paid compared to industry
averages, the sub-adviser candidate's commitment to mutual fund advisory
activities and the quality of the sub-adviser candidate's proposal generally. As
a part of the
1
review process, AFIMS and CRA RogersCasey met with the Investment Operations
Committee/1/ (the "Committee") of the Board of Trustees and discussed with the
Committee the proposed selection of GEAM as a new Sub-Adviser for the Fund. The
Committee recommended to the full Board of Trustees approval of GEAM as a new
Sub-Adviser of the Fund. Upon completion of the review process, which included
discussion of the matter at the Trustees' committee and board meetings on
February 11, 2004 and February 12, 2004, the Trustees voted unanimously, with
the Trustees who are not "interested persons" (as such term is defined in the
1940 Act) of the Trust, AFIMS, the Sub-Advisers or their affiliates voting
separately after conferring with their independent counsel, to terminate the
Previous Sub-Adviser Agreement as of the close of business on April 29, 2004 and
to appoint GEAM as a new Sub-Adviser to the Fund effective April 30, 2004
pursuant to the New Sub-Adviser Agreement. In evaluating the proposal, the
Trustees considered generally the same factors considered by AFIMS and CRA
RogersCasey. The Trustees' decision to terminate the Previous Sub-Adviser
Agreement was based primarily on Putnam's underperformance in managing its
allocated portion of the Fund's assets and certain personnel changes to the
management team assigned by Putnam to manage the Fund. The Trustees gave
substantial consideration to the underperformance of the Fund relative to its
benchmark and peer group for the one- and three-year periods ending December 31,
2003. The Trustees also considered the turnover of Putnam's Large-Cap Growth and
Specialty Growth teams, the management teams responsible for the day-to-day
management of Putnam's portion of the Fund. The Trustees viewed such turnover as
detrimental to the consistency in management and long-term performance of the
Fund.
At the February 12, 2004 meeting, the Trustees were provided with financial
and other information about GEAM. At the meeting, they were also provided with
performance information relating to GEAM and information about its investment
style and current personnel. In the course of their deliberations, the Trustees
received information concerning the investment philosophy and investment process
applied by GEAM, as well as its research capabilities. The Trustees considered
information relating to the investment performance of GEAM over various periods,
including one-, three- and five-year year periods. The Trustees gave substantial
consideration to how GEAM's investment style would complement Jennison's
investment style. The Trustees also gave significant consideration to the
quality and stability of GEAM's investment management team. The Trustees
considered the terms of the New Sub-Adviser Agreement and the fact that it was
substantially the same as the Previous Sub-Adviser Agreement with Putnam. The
Trustees also considered the amount of advisory fees that would be paid by the
Fund to AFIMS. The Trustees concluded that entering into the New Sub-Adviser
Agreement was in the best interests of the Fund and its shareholders.
INFORMATION REGARDING GEAM
GEAM, a wholly-owned subsidiary of General Electric Company, is located at
3001 Summer Street, P.O. Box 7900, Stamford, CT 06904. As of March 31, 2004,
GEAM had approximately $185 billion in assets under management. David B.
Carlson, a Director and Executive Vice President of GEAM, is portfolio manager
for the portion of the Fund managed by GEAM. He oversees a team of professionals
who manage U.S. equity investments for GEAM. Mr. Carlson joined GEAM in 1982 as
a securities analyst for investment operations and became a vice president for
mutual fund portfolios in 1987, senior vice president in 1989 and executive vice
president in 2003.
All information about GEAM in this Information Statement has been provided
by GEAM.
Parent Company of GE Asset Management Incorporated
General Electric Company, 3135 Easton Turnpike, Fairfield, CT 06828-0001,
is 100% owner of GEAM.
Principal Executive Officers and Directors of GEAM
The table below lists the individuals who serve as principal executive
officers and directors of GEAM. The address for GEAM's personnel is 3001 Summer
Street, P.O. Box 7900, Stamford, CT 06904.
Name Principal Occupation
---- --------------------
David B. Carlson EVP-Domestic Equities
Michael Cosgrove EVP-Chief Commercial Officer
Ralph Layman EVP-International Equities
Alan Lewis EVP-General Counsel
Robert MacDougall EVP-Fixed Income
John Myers Chief Executive Officer
Donald Torey EVP-Alternative Investments
John Walker EVP-Chief Financial Officer
Kathryn Karlic EVP-Fixed Income
_________
/1/ The Investment Operations Committee is composed of three Trustees who are
not "interested persons" (as such term is defined in the 1940 Act) of the
Trust, AFIMS or the Sub-Adviser or their affiliates and two Trustees who are
"interested persons." The Committee monitors investment adviser performance
and analyzes fund data.
2
No arrangements or understandings made in connection with the New
Sub-Adviser Agreement exist between AFIMS and GEAM with respect to the
composition of the Board of Directors of GEAM 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 GEAM
GEAM serves as adviser or sub-adviser to other mutual funds with similar
investment objectives as the Select Growth Fund. Information about these funds
appears in the following table, which shows investment advisory fees but not
other fund expenses. GEAM has not waived, reduced or otherwise agreed to reduce
its compensation from these funds under the applicable contracts.
Approximate
Assets as of
Fund Portfolio Objective May 1, 2004 Fees
- ---- --------- --------- ----------- ----
GE Funds GE Premier Growth Long term growth $601 million 0.60%
Equity Fund of capital and
future income
rather than current
income.
GE Institutional Funds Premier Growth Long term growth $342 million First $25million 0.55%
Equity Fund of capital and Next $25million: 0.45%
future income. Over $50 million: 0.35%
Description of the Previous Sub-Adviser Agreement and the New Sub-Adviser
Agreement
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 Shareholder Meeting on September 18, 1996 for the purpose of approving a
new Sub-Adviser Agreement with Putnam. The Previous Sub-Adviser Agreement was
last approved by the Trustees, including the Trustees who are not "interested
persons" of the Trust, AFIMS, the Sub-Advisers, or their affiliates at a meeting
of the Board of Trustees on May 15, 2003. Except for different effective and
termination dates and the sub-advisory fee schedule, the terms of the New
Sub-Adviser Agreement are similar in all substantive respects to the terms of
the Previous Sub-Adviser Agreement.
For its services provided under the Previous Sub-Adviser Agreement, Putnam
was paid by AFIMS a fee computed daily and paid quarterly at an annual rate
based on Putnam's portion of the average daily net assets of the Fund as set
forth below:
Sub-Advisory Fees under the Previous Sub-Adviser Agreement
Net Assets Rate
---------- ----
First $50 Million .......................... 0.50%
Next $100 Million .......................... 0.45%
Next $100 Million .......................... 0.35%
Next $100 Million .......................... 0.30%
Over $350 Million .......................... 0.25%
During the fiscal year ended December 31, 2003, AFIMS would have paid
Putnam and Jennison $1,108,659 and $943,435, respectively, assuming that each
sub-adviser managed 50% of the Fund's net assets for the period January 1, 2003
through December 31, 2003, for their sub-advisory services. If the fee schedule
with respect to the New Sub-Adviser Agreement had been in effect during the last
fiscal year, GEAM and Jennison would have received $915,405 and $943,435,
respectively, representing a total decrease of $193,254, or 9.42%, from the fees
paid by AFIMS to Putnam and Jennison. For the period January 1, 2003 through
April 17, 2003, AFIMS paid Putnam $391,945 for its sub-advisory services. For
the period April 18, 2003 through December 31, 2003, AFIMS paid Putnam and
Jennison, which became a Sub-Adviser of the Fund effective April 18, 2003,
$879,849 and $749,286, respectively, for their sub-advisory services. Based on
the Fund's net assets at January 1, 2004 of approximately $625,965,935, the
annual sub-adviser fees paid by AFIMS would decrease from $2,327,898, to
$2,110,757, a decrease of $217,141, or 9.33%. AFIMS has voluntarily agreed to
reduce its management fee paid by the Fund by an amount that coincides with the
benefit it receives from the lower sub-advisory fees it is required to pay GEAM
under the New Sub-Adviser Agreement compared to the sub-advisory fees paid to
Putnam under the Previous Sub-Adviser Agreement.
3
For its services under the New Sub-Adviser Agreement, GEAM will be paid by
AFIMS a fee computed daily and paid quarterly at an annual rate based on GEAM's
portion of the average daily net assets of the Fund as set forth below. The
Trustees believe the fee under the New Sub-Adviser Agreement provides an
effective means of compensating GEAM for its investment advisory services.
Sub-Advisory Fees under the New Sub-Adviser Agreement
Net Assets Fee Rate
---------- --------
First $25 Million .................. 0.60 %
Next $25 Million ................... 0.55 %
Next $25 Million ................... 0.45 %
Next $25 Million ................... 0.40 %
Over $100 Million .................. 0.245 %
The New Sub-Adviser Agreement provides that, in return for its fees, GEAM,
as Sub-Adviser, 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 as 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
GEAM 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 GEAM will provide at its expense all necessary investment, management and
administrative facilities needed to carry out its duties under the New
Sub-Adviser Agreement, but excluding brokerage expenses and pricing and
bookkeeping services.
The New Sub-Adviser Agreement will remain in full force and effect through
May 30, 2005 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 Agreement 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 GEAM on 60 days' written notice. As required by the 1940 Act, the
New Sub-Adviser Agreement will automatically terminate, without the payment of
any penalty, in the event of its assignment. It 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 Agreement provides that, in the absence of (i) willful
misfeasance, bad faith or gross negligence on the part of GEAM, or (ii) reckless
disregard by GEAM of its obligations and duties under the New Sub-Adviser
Agreement, GEAM shall not be liable to the Trust, AFIMS or to any shareholder of
the Trust, for any error of judgment or mistake of law or for any loss in
connection with the matters to which the New Sub-Adviser Agreement relates.
In addition to approving the New Sub-Adviser Agreement, the Trustees also
approved new principal investment strategies for the Fund to reflect GEAM's
investment management style. The strategies available for use by Jennison are
not expected to change as a result of GEAM's appointment. In managing its
allocated portion of the Fund's assets, GEAM invests in 30 to 40 large- and
medium-sized companies that GEAM believes have above-average growth histories
and/or growth potential, while Jennison seeks common stocks of companies that it
believes are poised to achieve and maintain superior earnings growth. The Fund's
previous principal investment strategies, reflecting management of the Fund by
Putnam and Jennison, were stated in the Fund's prospectus dated May 1, 2003. The
strategies to be used by GEAM and Jennison, and the Fund's investment objective,
which remains unchanged, are included in the Trust's current prospectus dated
May 1, 2004. The new principal investment strategies also are set forth below.
Principal Investment Strategies of the Fund
To achieve its objective, the Fund takes a multi-manager approach whereby
two Sub-Advisers independently manage their own portions of the Fund's assets.
The portion of the Fund managed by GEAM invests primarily in 30 to 40 large- and
medium-sized companies that GEAM believes have above-average growth histories
and/or growth potential. GEAM selects common stocks from a number of industries
based on its views of the merits of individual companies. GEAM seeks to identify
stocks of companies with characteristics such as above-average annual growth
rates, financial strength and leadership in their respective industries.
Jennison 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 use a fundamental bottom-up approach to selecting stocks for
the Fund. Each
4
of the Sub-Advisers manages approximately one-half of the Fund's assets. At any
point, however, the Manager may change the allocation of the Fund's assets
between the two Sub-Advisers on a basis determined by the Manager to be in the
best interest 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 between such proportions could change from time to time.
At least 80% of the Fund's net assets normally will consist of common
stocks. The Fund also may purchase convertible bonds and preferred stocks and
warrants. The Fund normally invests substantially all of its investments in
equity securities, although it may invest up to 20% in debt securities including
up to 15% in "junk bonds". The Fund may invest up to 25% of its assets in
foreign securities (not including its investments in ADRs).
OTHER INFORMATION
The shares of the Fund may be purchased only by separate accounts
("Separate Accounts") established by Allmerica Financial Life Insurance and
Annuity Company ("Allmerica Financial Life") or First Allmerica Financial Life
Insurance Company ("First Allmerica") for the purpose of funding variable
annuity contracts and variable life insurance policies issued by Allmerica
Financial Life or First Allmerica and by qualified pension and retirement plans.
Both Allmerica Financial Life and First Allmerica are wholly-owned subsidiaries
of Allmerica Financial Corporation ("AFC"), a publicly-traded Delaware holding
company for a group of affiliated companies. On April 30, 2004, 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
1-800-533-7881.
Broker Commissions
During the fiscal year ended December 31, 2003, a total of $980.00 of
commissions was paid by the Fund to Wachovia Capital Markets LLC, an affiliated
broker-dealer of Prudential Investments LLC, an affiliate of Jennison. Such
amount represents .08% of the Fund's aggregate brokerage commissions paid in
fiscal year 2003.
Distributor, Administrator
VeraVest Investments, Inc. ("VII"), a wholly-owned subsidiary of AFC,
serves as the Distributor for the Trust. VII, 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.
May 31, 2004
5
Appendix
SUB-ADVISORY AGREEMENT
SUB-ADVISORY AGREEMENT executed as of April 30, 2004, between Allmerica
Financial Investment Management Services, Inc. (the "Manager") and GE Asset
Management Incorporated (the "Sub-Adviser") (the "Agreement").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is agreed as
follows:
1. SERVICES TO BE RENDERED BY SUB-ADVISER TO THE TRUST
(a) Subject always to the control, supervision and direction of the
Trustees of Allmerica Investment Trust (the "Trust" or "AIT"), a
Massachusetts business trust, and any written guidelines adopted by
the Trustees or the Manager, the Sub-Adviser, at its expense, will
furnish continuously an investment program for the Select Growth Fund
(the "Fund") and such other series of shares as the Trust, the Manager
and the Sub-Adviser may from time to time agree on (together, the
"Funds"). The Sub-Adviser acknowledges the Fund may have one or more
other sub-advisers and that the Manager shall from time to time
determine the portion of the Fund's assets to be managed by the
Sub-Adviser (the "Sub-Adviser's Portion"), provided that the Manager
provides reasonable advance written notice of any change to the
Sub-Adviser's Portion of the Fund. The Sub-Adviser will make
investment decisions on behalf of the Sub-Adviser's Portion and will
determine from time to time what investments will be purchased,
retained or sold for the Sub-Adviser's Portion of the Fund and shall
place all orders for the purchase and sale of portfolio securities
relating thereto. The Sub-Adviser shall not consult with any AIT
Sub-Adviser (other than an affiliated person of the Sub-Adviser),
concerning transactions for the Fund in securities or other assets. To
the extent that multiple AIT Sub-Advisers serve as investment advisers
of the Fund, the Sub-Adviser shall be responsible for providing
investment advice to the Fund only with respect to the Sub-Adviser's
Portion of the Fund's portfolio. In the performance of its duties, the
Sub-Adviser will comply with the provisions of this Agreement and
Declaration of Trust and Bylaws of the Trust and the objectives and
policies of the Fund, as set forth in the Trust's currently effective
registration statement under the 1940 Act, and any amendments or
supplements thereto ("Registration Statement") as filed with the
Securities and Exchange Commission ("SEC") and any applicable federal
and state laws. The Sub-Adviser will comply with other policies which
the Trustees of the Trust (the "Trustees") or the Manager, as the case
may be, may from time to time determine and which are furnished in
writing to the Sub-Adviser including, if requested by the Manager,
managing the Sub-Adviser's Portion as if it were a separate investment
company for the purposes of determining compliance with the provisions
of the Agreement and Declaration of Trust and Bylaws of the Trust and
the objectives and policies of the Fund, as set forth in the currently
effective Registration Statement of the Trust filed with the SEC and
any applicable federal and state laws, and other policies which the
Trustees of the Trust or the Manager may furnish in writing to the
Sub-Adviser. The Sub-Adviser shall make its officers and employees
available to the Manager from time to time at reasonable times to
review investment policies of the Fund and to consult with the Manager
regarding the investment affairs of
the Fund. In the performance of its duties hereunder, the Sub-Adviser
is and shall be an independent contractor and, unless otherwise
expressly provided or authorized, shall have no authority to act for
or represent the Trust in any way or otherwise be deemed to be an
agent of the Trust.
(b) The Sub-Adviser, at its expense, will furnish (i) all investment and
management facilities, including salaries of personnel necessary for
it to perform the duties set forth in this Agreement, and (ii)
administrative facilities, including clerical personnel and equipment
necessary for the conduct of the investment affairs of the Fund
(excluding brokerage expenses and pricing and bookkeeping services).
(c) The Sub-Adviser shall place all orders for the purchase and sale of
portfolio investments for the Sub-Adviser's Portion with issuers,
brokers or dealers selected by the Sub-Adviser, which may include
brokers or dealers affiliated with the Sub-Adviser. In the selection
of such brokers or dealers and the placing of such orders, the
Sub-Adviser always shall seek best execution (except to the extent
permitted by the next sentence hereof), which is to place portfolio
transactions where the Fund can obtain the most favorable combination
of price and execution services in particular transactions or provided
on a continuing basis by a broker or dealer, and to deal directly with
a principal market maker in connection with over-the-counter
transactions, except when it is believed that best execution is
obtainable elsewhere. Subject to such policies as the Trustees may
determine, the Sub-Adviser shall not be deemed to have acted
unlawfully or to have breached any duty created by this Agreement or
otherwise solely by reason of its having caused the Trust to pay a
broker or dealer that provides brokerage and research services an
amount of commission for effecting a portfolio investment transaction
in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction, if the Sub-Adviser
determines in good faith that such excess amount of commission was
reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of either
that particular transaction or the overall responsibilities of the
Sub-Adviser and its affiliates with respect to the Trust and with
respect to other clients of the Sub-Adviser as to which the
Sub-Adviser or any affiliate of the Sub-Adviser exercises investment
discretion. Subject to the Sub-Adviser's obligations to seek best
execution, the Manager agrees that the Sub-Adviser, in its sole
discretion, may place transactions on behalf of the Fund with any
broker-dealer, which is deemed to be an affiliate of the Manager, the
Sub-Adviser or with any other entity that serves as investment adviser
or sub-adviser to the Fund, or which is otherwise affiliated with the
Fund in accordance with the 1940 Act (the "Affiliated Broker-Dealers")
so long as such transactions are effected in conformity with the
requirements (including any applicable exemptions and administrative
interpretations set forth in Part II of the Sub-Adviser's Form ADV
Registration Statement on file with the Securities and Exchange
Commission ("Form ADV")) of Section 11(a)(1)(H) of the Securities
Exchange Act of 1934 (the "1934 Act") and any other applicable laws
and regulations. In all such dealings, the Affiliated Broker-Dealers
shall be authorized and entitled to retain any commissions,
remuneration or profits which may be made in such transactions and
shall not be liable to account for the same to the Manager or the
Trust.
(d) The Manager further authorizes the Sub-Adviser and the Affiliated
Broker-Dealers to execute agency cross transactions (the "Cross
Transactions") on behalf of the Fund. Cross
2
Transactions are transactions, which may be effected by the Affiliated
Broker-Dealers acting for both the Trust and the counterparty to the
transaction. Cross Transactions enable the Sub-Adviser to purchase or
sell a block of securities for the Trust at a set price and possibly
avoid an unfavorable price movement that may be created through
entrance into the market with such purchase or sale order. As such,
the Sub-Adviser believes that Cross Transactions can provide
meaningful benefits for the Trust and its clients generally. The
Manager and the Trust should be aware, however, that in a Cross
Transaction an Affiliated Broker-Dealer will be receiving commissions
from both sides of the trade and, therefore, there is a potentially
conflicting division of loyalties and responsibilities. The Manager
may revoke, at any time, its authorization on behalf of the Fund for
the Sub-Adviser to execute cross transactions by written notice to the
Sub-Adviser.
(e) The Manager's administrator will provide daily capstock information
with respect to the Fund in a form reasonably satisfactory to the
parties hereto.
2. OTHER AGREEMENTS
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, partner, director, officer or
employee of, or be otherwise interested in, the Sub-Adviser, and in any person
controlled by or under common control with the Sub-Adviser, and that the
Sub-Adviser and any person controlled by or under common control with the
Sub-Adviser may have an interest in the Trust.
3. SERVICES NOT EXCLUSIVE
It is understood that the Sub-Adviser and persons controlled by or under
common control with the Sub-Adviser have and may have advisory, management
service or other contracts with other organizations and persons, and may have
other interests and businesses. The services furnished by the Sub-Adviser
hereunder are not to be deemed exclusive, and except as the Sub-Adviser may
otherwise agree in writing, the Sub-Adviser shall be free to furnish similar
services to others so long as its services under this Agreement are not impaired
thereby. Nothing in this Agreement shall limit or restrict the right of any
director, officer or employee of the Sub-Adviser, who may also be a trustee,
officer or employee of the Trust, to engage in any other business or to devote
his or her time and attention in part to the management or other aspects of any
other business, whether of a similar nature or a dissimilar nature.
4. COMPENSATION TO BE PAID BY THE MANAGER TO THE SUB-ADVISER
The Manager will pay to the Sub-Adviser as compensation for the
Sub-Adviser's services rendered a fee, determined as described in Schedule A
which is attached hereto and made a part hereof. Such fee shall be paid by the
Manager and not by the Trust.
5. EXPENSES
During the term of this Agreement, the Sub-Adviser will bear all
expenses incurred by it in connection with its services under this Agreement.
The Sub-Adviser shall not be responsible for any other expenses incurred by the
Trust or the Manager.
3
6. AMENDMENTS OF THIS AGREEMENT
This Agreement (including Schedule A attached hereto) shall not be
amended as to any Fund unless such amendment is approved at a meeting by
the affirmative vote of a majority of the outstanding voting securities of
the Fund, if such approval is required under the Investment Company Act of
1940, as amended (" 1940 Act"), and by the vote, cast in person at a
meeting called for the purpose of voting on such approval, of a majority of
the Trustees who are not interested persons of the Trust or of the Manager
or of the Sub-Adviser.
7. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT
This Agreement shall be effective as of the date executed, and shall
remain in full force and effect as to the Sub-Adviser's Portion of the Fund
continuously thereafter, until terminated as provided below:
(a) Unless terminated as herein provided, this Agreement shall remain in
full force and effect through May 30, 2005 and shall continue in full
force and effect for successive periods of one year thereafter, but
only so long as such continuance is specifically approved at least
annually (i) by the Trustees or by the affirmative vote of a majority
of the outstanding voting securities of the Fund, and (ii) by a vote
of a majority of the Trustees who are not interested persons of the
Trust or of the Manager or of any Sub-Adviser, by vote cast in person
at a meeting called for the purpose of voting on such approval;
provided, however, that if the continuance of this Agreement is
submitted to the shareholders of the Fund for their approval and such
shareholders fail to approve such continuance of this Agreement as
provided herein, the Sub-Adviser may continue to serve hereunder in a
manner consistent with the 1940 Act and the rules and regulations
thereunder.
(b) This Agreement may be terminated as to the Sub-Adviser's Portion of
the Fund without the payment of any penalty by the Manager, subject to
the approval of the Trustees, by vote of the Trustees, or by vote of a
majority of the outstanding voting securities of such Fund at any
annual or special meeting or by the Sub-Adviser, in each case on sixty
days' written notice.
(c) This Agreement shall terminate automatically, without the payment of
any penalty, in the event of its assignment or in the event that the
Management Agreement with the Manager shall have terminated for any
reason.
8. CERTAIN DEFINITIONS
For the purposes of this Agreement, the "affirmative vote of a
majority of the outstanding voting securities" means the affirmative vote,
at a duly called and held meeting of shareholders, (a) of the holders of
67% or more of the shares of the Fund present (in person or by proxy) and
entitled to vote at such meeting, if the holders of more than 50% of the
outstanding shares of the Fund entitled to vote at such meeting are present
in person or by proxy, or (b) of the holders of more than 50% of the
outstanding shares of the Fund entitled to vote at such meeting, whichever
is less.
4
For the purposes of this Agreement, the terms "control", "interested
person" and "assignment" shall have their respective meanings defined in the
1940 Act and rules and regulations thereunder, subject, however, to such
exemptions as may be granted by the SEC under said Act; the term "specifically
approve at least annually" shall be construed in a manner consistent with the
1940 Act and the rules and regulations thereunder; and the term "brokerage and
research services" shall have the meaning given in the 1934 Act and the rules
and regulations thereunder.
For purposes of this Agreement, "AIT Sub-Adviser" means an investment
adviser, as defined in Section 2(a)(20)(B) of the 1940 Act, for a series of the
Trust other than the Manager.
9. NON-LIABILITY OF SUB-ADVISER
(a) The Sub-Adviser, its officers and directors, and any person who
controls the Sub-Adviser within the meaning of Section 15 of the
Securities Act of 1933, as amended, shall not be liable for any error
of judgment or mistake of law or for any loss suffered by the Trust or
its shareholders or by the Manager in connection with the matters to
which this Agreement relates, except a 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.
(b) In no event will the Sub-Adviser have any responsibility or liability
for any other series of the Trust, for any portion of the Trust not
managed by the Sub-Adviser or for the acts or omissions of any other
current, prior or interim adviser or sub-adviser to the Trust.
In particular, in the event the Sub-Adviser shall manage only a
portion of the Trust's investments, the Sub-Adviser shall have no
responsibility for the Trust's being in violation of any applicable
law or regulation or investment policy or restriction applicable to
the Trust as a whole or for the Trust's failing to qualify as a
regulated investment company under the Code, if the securities and
other holdings of the segment of the Trust managed by the Sub-Adviser
are such that such segment would not be in such violation or fail to
so qualify if such segment were deemed a separate series of the Trust
or a separate "regulated investment company" under the Code.
(c) In no event will the Sub-Adviser have any responsibility or liability
for any investment transactions recommended or effected before the
effective date of this Agreement, or for any violations or alleged
violations of applicable law and regulation or investment policy or
restriction applicable to the Trust to the extent caused by the
Manager's failure to provide timely written information as set forth
in Section 13 below or to the extent caused by an Affiliated
Broker-Dealer's failure to comply with the requirements of Section
11(a)(1)(H) of the 1934 Act.
Nothing in this section shall be deemed a limitation or waiver of any
obligation or duty that may not by law be limited or waived.
5
10. LIMITATIONS OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS
A copy of the Trust's Agreement and Declaration of Trust is on file with
the Secretary of the Commonwealth of Massachusetts, and notice is hereby given
that this instrument is executed by the Trustees as Trustees and not
individually and that the obligations of this instrument are not binding upon
any of the Trustees, officers or shareholders individually but are binding only
upon the assets and property of the appropriate Fund.
11. REPRESENTATIONS OF THE MANAGER AND SUB-ADVISER
The Manager and Sub-Adviser each represent, warrant and agree that each of
them: (i) are registered as an investment adviser under the Advisers Act and
will continue to be so registered for so long as this Agreement remains in
effect; (ii) are not prohibited by the 1940 Act or the Advisers Act from
performing the services contemplated by this Agreement; (iii) have met, and will
seek to continue to meet for so long as this Agreement remains in effect, any
other applicable federal or state requirements, or the applicable requirements
of any regulatory or industry self-regulatory agency, necessary to be met in
order to perform the services contemplated by this Agreement; (iv) have the
authority to enter into and perform the services contemplated by this Agreement
and the execution, delivery and performance by the Manager and Sub-Adviser of
this Agreement does not contravene or constitute a default under any agreement
binding upon either party; (v) have the authority to enter into this Agreement
and the Manager has the authority to appoint the Sub-Adviser as an investment
sub-adviser to perform the services contemplated by this Agreement; (vi) will
promptly notify the other party of the occurrence of any event that would
disqualify either party from serving as an investment adviser of an investment
company pursuant to Section 9(a) of the 1940 Act or otherwise.
12. FURTHER DUTIES
(a) The Manager agrees to provide to the Sub-Adviser copies of the Trust's
Trust Instrument, By-Laws, Registration Statement, written
instructions and directions of the Trustees and the Manager, and any
amendments or supplements to any of these materials as soon as
practicable after such materials become available; and further agrees
to identify to the Sub-Adviser in writing any investments that are
restricted or prohibited by the Fund, including those issued by
entities that are affiliated persons as defined in the 1940 Act, and
any broker-dealers, which are affiliated with the Manager (in addition
to the Manager itself), or with any entity other than the Sub-Adviser
that serves as investment adviser, sub-adviser or principal
underwriter to the Fund.
(b) The Manager and the Sub-Adviser agree that neither of them nor any of
their affiliates, will in any way refer directly or indirectly to
their relationship with one another or any of their respective
affiliates in offering, marketing or other promotional materials
without the express consent of the other, which consent will be
promptly provided and not unreasonably withheld. Any offering,
marketing or promotional material submitted for approval will be
deemed to be "consented to" if a response is not received within 15
days of receipt of the material by a party.
6
13. GOVERNING LAW
This Agreement shall be construed in accordance with the 1940 Act and the
laws of the State of Massachusetts, without giving effect to the conflicts of
laws principles thereof. To the extent that the applicable laws of the State of
Massachusetts conflict with the applicable provisions of the 1940 Act, the
latter shall control.
14. NOTICES
Any notice herein required is to be in writing and is deemed to have been
given to the Sub-Adviser or the Manager upon receipt of the same at their
respective addresses set forth below. All written notices required or permitted
to be given under this Agreement will be delivered by personal service, by
postage mail return receipt requested or by facsimile machine or a similar means
of same delivery which providers evidence of receipt (with a confirming copy by
mail as set forth herein). All notices provided to the Manager will be sent to
the attention of Counsel, 440 Lincoln Street, Worcester, Massachusetts 01653.
All notices provided to the Sub-Adviser will be sent to the attention of Matt
Simpson, Senior Vice-President, General Counsel - Asset Management Services, GE
Asset Management Incorporated. 3001 Summer Street P.O. Box 120031 Stamford, CT
06912. Facsimile: 203-708-3107.
7
IN WITNESS WHEREOF, Allmerica Financial Investment Management Services, Inc. has
caused this instrument to be signed in duplicate on its behalf by its duly
authorized representative and GE Asset Management Incorporated has caused this
instrument to be signed in duplicate on its behalf by its duly authorized
representative, all as of the day and year first above written.
Allmerica Financial Investment Management Services, Inc.
By: /s/ John P. Kavanaugh
------------------------------------------------
Title: President
------------------------------------------------
GE Asset Management Incorporated
By: /s/ Michael Cosgrove
------------------------------------------------
Title: Chief Commercial Officer
------------------------------------------------
Accepted and Agreed to as of the day and year first above written:
Allmerica Investment Trust
By: /s/ Donald P. Wayman
---------------------------
Title: Vice President
---------------------------
8
SCHEDULE A
The Manager will pay to the Sub-Adviser as full compensation for the
Sub-Adviser's services rendered, a fee computed daily and paid quarterly at an
annual rate based on the Sub-Adviser's Portion of the average daily net assets
of the Fund as described below:
Net Assets Fee Rate
---------- ---------
First $25 Million 0.60%
Next $25 Million 0.55%
Next $25 Million 0.45%
Next $25 Million 0.40%
Over $100 Million 0.245%
The average daily net assets of the Fund shall be determined by taking an
average of all of the determinations of net assets during each month at the
close of business on each business day during such month while this Agreement is
in effect.
The fee for each quarter shall be payable within ten (10) business days
after the end of the quarter.
If the Sub-Adviser shall serve for any period less than a full month, the
foregoing compensation shall be prorated according to the proportion which such
period bears to a full month.
9
June 1, 2004
Dear Contract/Policy Owner:
GE Asset Management Incorporated ("GEAM") has been hired effective April
30, 2004 as a sub-adviser (a "Sub-Adviser") of the Select Growth Fund (the
"Fund") of Allmerica Investment Trust (the "Trust") to serve along with Jennison
Associates LLC ("Jennison"). Prior to the appointment of GEAM as a Sub-Adviser
of the Fund, Jennison and Putnam Investment Management, LLC served as
co-Sub-Advisers of the Fund. GEAM, a wholly-owned subsidiary of General Electric
Company, had approximately $185 billion of assets under management as of March
31, 2004. Presently, each of GEAM and Jennison manage approximately one-half of
the Fund's assets. The investment advisory fees charged by the Trust's
investment manager, Allmerica Financial Investment Management Services, Inc., to
the Fund will not increase as a result of this change.
Please take a few minutes to read the attached Information Statement. It
contains additional information about GEAM, the factors that were considered by
management and the Trustees of the Fund in making the decision to hire GEAM, the
terms of the new Sub-Adviser Agreement with GEAM and GEAM's investment strategy.
This action will not require you to send a proxy and we are not asking
for a proxy. As always, please feel free to contact your financial
representative or us with any questions or comments you may have.
Sincerely,
/s/ John P. Kavanaugh
John P. Kavanaugh
President
Enclosure