Exhibit 4
MANAGEMENT AGREEMENT
Allmerica Asset Management, Inc. (the "Adviser") and Allmerica Prime Trust
("Trust") hereby confirm their Agreement covering services as hereinafter set
forth. The terms and provisions of this Agreement shall take effect on November
___, 2002.
1. The Trust hereby retains the Adviser as investment adviser for the
shares of the Allmerica Prime Fund of the Trust as listed on Schedule
A attached hereto and for such other series of shares as the Trust and
the Adviser may from time to time agree on, each such series of shares
being hereinafter referred to as a "Fund." The Adviser shall also
manage, supervise and conduct the other affairs and business of the
Trust and matters incidental thereto, subject always to the provisions
of the Trust's Agreement and Declaration of Trust, Bylaws and of the
provisions of the Investment Company Act of 1940, as amended ("1940
Act"). In providing and performing such services, the Adviser will
function in cooperation with and subject always to the direction and
control of the Trustees of the Trust and in cooperation with the
Trust's authorized officers and representatives.
2. Investment Advisory Services. The Adviser agrees to act as the
investment adviser for, and to manage the investment of assets of, each
Fund and to make purchases and sales of securities for each Fund's
account. The Adviser shall assume responsibility for the management of
the portfolio securities of each Fund and the making and execution of
all investment decisions for each Fund.
A. Investment of each Fund's assets shall be in accordance with
the objectives and policies of each Fund as set forth in the
current Registration Statement of the Trust filed with the
Securities and Exchange Commission (the "SEC"), and any
applicable federal and state laws.
B. The Adviser shall report to the Trustees of the Trust (the
"Trustees") at such times and in such detail as the Trustees
may from time to time determine to be appropriate in order to
permit the Trustees to determine the adherence by the Adviser
to the investment policies and legal requirements of each
Fund.
C. The Adviser shall place all orders for the purchase and sale
of portfolio investments for the account of the Funds with
issuers, brokers or dealers selected by the Adviser which may
include brokers or dealers affiliated with the Adviser. In the
selection of such brokers or dealers and the placing of such
orders, the Adviser shall always seek best execution (except
to the extent permitted by the next sentence hereof), which is
to place portfolio transactions where the Trust can obtain the
most favorable combination of price and execution services in
particular transactions or provided on a continuous basis by a
broker or dealer, and to deal directly with a principal market
maker in connection with over-the-counter transactions, except
when it is believed that best execution is obtainable
elsewhere. Subject to such policies as the Trustees may
determine, the Adviser shall not be deemed to have acted
unlawfully or to have breached any duty created by this
Agreement or otherwise solely by reason of its having caused
the Trust to pay a broker or dealer that provides brokerage
and research services
an amount of commission for effecting a portfolio investment
transaction which is in excess of the amount of commission
another broker or dealer would have charged for effecting that
transaction, if the Adviser determines in good faith that such
excess amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular
transaction or the overall responsibilities of the Adviser and
its affiliates with respect to the Trust and to other clients as
to which the Adviser or any affiliate of the Adviser exercises
investment discretion.
D. Subject to the provisions of the Trust's Agreement and
Declaration of Trust and the 1940 Act, the Adviser, at its
expense, may select and contract with one or more investment
advisers (the "Sub-Advisers") to provide to the Adviser such
investment advice relating to the assets of a Fund and related
services as the Adviser may from time to time deem appropriate,
or delegate any or all of its functions hereunder to one or more
Sub-Advisers, provided that the Trustees shall approve any such
contract with a Sub-Adviser. So long as any Sub-Adviser serves
as investment adviser to any Fund pursuant to a Sub-Adviser
Agreement in substantially the form agreed to by the appropriate
parties (the "Sub-Adviser Agreement"), the obligation of the
Adviser under this Agreement with respect to managing the
investment portfolio of such Fund shall be, subject in any event
to the control of the Trustees, to determine and review with
such Sub-Adviser the investment objectives, policies and
restrictions and placing of all orders for the purchase and sale
of portfolio securities for such Fund, all as further described
in the Sub-Adviser Agreement. The Adviser will compensate any
Sub-Adviser of any Fund for its services to such Fund. The
Adviser may terminate the services of any Sub-Adviser at any
time, subject to the approval of the Trustees, and shall at such
time assume the responsibilities of such Sub-Adviser unless and
until a successor Sub-Adviser is selected.
E. Subject to the provisions of the Trust's Agreement and
Declaration of Trust and the 1940 Act and the direction and
control of the Trustees, the Adviser may choose to have any
Fund participate in a master feeder arrangement whereby a
master portfolio established pursuant to the master feeder
arrangement would serve as the sole investment vehicle for such
Fund.
3. Management Services. The Adviser will perform (or arrange for the
performance by its affiliates) the management and administrative
services necessary for the operation of the Trust.
A. Subject to the supervision of the Trustees, and unless
otherwise provided herein the Adviser shall be responsible for
the day to day business activities of the Trust and shall
perform all services appropriate thereto, including: (i)
providing for members of its organization to serve without
salaries as Trustees, officers, or agents of the Trust; (ii)
furnishing at its expense such office space as may be
necessary for the suitable conduct of the Trust's business
(other than pricing and bookkeeping) and all necessary light,
heat, telephone service, office equipment stationery, and
stenographic, clerical, mailing and messenger service in
connection with such office; (iii) on behalf of the Funds of
the Trust, supervising
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relations with, and monitoring the performance of, custodians,
depositories, transfer and pricing agents, accountants, attorneys,
underwriters, brokers and dealers, insurers and other persons in any
capacity deemed to be necessary or desirable; (iv) preparing all
general shareholder communications, including shareholder reports; (v)
conducting shareholder relations; (vi) maintaining the Trust's
existence and its records; (vii) during such times as shares are
publicly offered, maintaining the registration and qualification of
the Trust's shares under federal and state law; and (viii)
investigating the development of management and shareholder services
(and, if appropriate, assisting in the development and implementation
of such services) designed to enhance the value or convenience of the
Funds of the Trust as investment vehicles.
B. The Adviser will make available to the Trust, promptly upon request,
the Trust's investment records and ledgers as are necessary to assist
the Trust to comply with requirements of the 1940 Act and the
Investment Advisers Act of 1940, as well as other applicable laws, and
will furnish to regulatory authorities having the requisite authority
any information or reports in connection with such services which may
be requested in order to ascertain whether the operations of the Trust
are being conducted in a manner consistent with applicable laws and
regulations. The Adviser shall also furnish such reports, evaluations,
information or analyses to the Trust as the Trustees may request from
time to time or as the Adviser may deem to be desirable. The Adviser
shall make recommendations to the Trustees with respect to Fund
policies, and shall carry out such policies as are adopted by the
Trustees. The Adviser shall, subject to review by the Trustees,
furnish such other services as the Adviser shall from time to time
determine to be necessary or useful to perform its obligations under
this Agreement. Should the Trust have occasion to call upon the
Adviser for services not herein contemplated or through the Adviser to
arrange for the services of others, the Adviser will act for the Trust
upon request to the best of its ability, the compensation for its
services to be agreed upon with respect to each such occasion as it
arises.
C. The Adviser will not furnish the Trust the following services under
this Agreement:
(i) determinations of the Trust's net assets and the net asset
value per share of its shares ("pricing");
(ii) maintenance of accounts, books and records as required by
Section 31(a) of the 1940 Act and the rules thereunder
("bookkeeping"); and
(iii) provision of custodian services, transfer agent services,
dividend disbursement and reinvestment services, shareholder
services, or shareholder recordkeeping services.
4. Expenses of the Trust. It is understood that the Trust will pay all its
expenses other than those expressly stated to be payable by the Adviser
hereunder. The expenses payable by the Trust shall include, without
limitation; (i) interest and taxes; (ii) brokerage commissions and other
costs in connection with the purchase or sale of securities and
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other investment instruments; (iii) fees and expenses associated with
pricing and bookkeeping;. (iv) fees and expenses of its Trustees other
than those who are "interested persons" of the Trust or the Adviser;
(v) legal and audit expenses; (vi) custodian, registrar and transfer
agent fees and expenses; (vii) fees and expenses related to the
registration and qualification of the Trust and the Fund's shares for
distribution under state and federal securities laws; (viii) expenses
of printing and mailing reports and notices and proxy material to
shareholders of the Funds; (ix) all other expenses incidental to
holding meetings of the Trust's shareholders, including proxy
solicitations therefor; (x) insurance premiums for fidelity and other
coverage; (xi) its proportionate share of association membership dues;
(xii) expenses of typesetting for printing Prospectuses and Statements
of Additional Information and supplements thereto; (xiii) expenses of
printing and mailing Prospectuses and Statements of Additional
Information and supplements thereto sent to existing shareholders: and
(ix) such non-recurring or extraordinary expenses as may arise,
including those relating to actions, suits or proceedings to which the
Trust is a party and the legal obligation which the Trust may have to
indemnify the Trust's Trustees and officers with respect thereto.
5. Compensation. As full compensation for the services furnished and
expenses borne by the Adviser herein, the Trust will pay a fee to the
Adviser, computed and paid monthly at an annual rate of the average
daily net assets of each Fund, as described in Schedule B which is
attached hereto.
The fee computed with respect to the net assets of each Fund shall be
paid from the assets of such Fund. The average daily net assets of each
Fund shall be determined by taking an average of all of the
determinations of net asset value during each month at the close of
business on each business day during such month while this Agreement is
in effect. The fee for each month shall be payable within five (5)
business days after the end of the month.
In the event that expenses of any Fund for any fiscal year should
exceed the expense limitation on investment company expenses imposed by
any statute or regulatory authority of any jurisdiction in which shares
of the Fund are then qualified for offer and sale, the compensation due
the Adviser such period shall be reduced by the amount of such excess
by a reduction or refund thereof, subject to readjustment during the
Fund's fiscal year. In the event that the expenses with respect to any
Fund should exceed any expense limitation which the Adviser may, by
written notice to the Trust, voluntarily declare to be effective,
subject to such terms and conditions as the Adviser may prescribe in
the notice, the compensation due the Adviser shall be reduced, and, if
necessary, the Adviser shall bear expenses with respect to the Fund, to
the extent required by the expense limitation.
If the Adviser shall serve for any period less than a full month, the
foregoing compensation shall be prorated according to the proportion
which such period bears to a full month.
In addition to the foregoing, the Trust will reimburse the Adviser for
the traveling and incidental expenses (other than the regular Worcester
office expenses described above) which may be incurred in connection
with special work performed at its request.
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In the event that the any Fund participates in a master feeder
arrangement as provided for in Section 2E of this Agreement and the
Adviser receives compensation for services rendered at the master
portfolio level, the Adviser may voluntarily waive any compensation for
the services furnished and expenses borne in connection with such Fund.
6. Limitation of Liability. The Adviser shall be under no liability to the
Trust or its Shareholders or creditors for any matter or thing in
connection with the performance of any of the Adviser's services
hereunder or for any losses sustained or that may be sustained in the
purchase, sale or retention of any investment for the Funds of the
Trust made by it in good faith; provided, however, that nothing herein
contained shall be construed to protect the Adviser against any
liability to the Trust by reason of the Adviser's own willful
misfeasance, bad faith, or gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligations and
duties hereunder.
7. Amendment. This Agreement may be amended at any time by mutual consent
of the parties, provided that such amendment shall have been approved
(i) by vote of a majority of the outstanding voting securities of each
Fund affected by such amendment, and (ii) by vote of a majority of the
Trustees of the Trust who are not interested persons of the Adviser or
any Sub-Adviser or of the Trust, cast in person at a meeting called for
the purpose of voting on such approval.
8. Termination. This Agreement shall be effective as of the date
executed, and shall remain in full force and effect as to each Fund
continuously thereafter, until terminated as provided below.
A. Unless terminated as herein provided, this Agreement shall remain
in full force and effect through________________________ , and
shall continue in full force and effect for successive periods of
one year thereafter, but only so long as each such continuance is
approved (i) by the Trustees or by the affirmative vote of a
majority of the outstanding voting securities of a Fund, and (ii)
by a vote of a majority of the Trustees who are not interested
persons of the Trust or of the Adviser or of any Sub-Adviser, by
vote cast in person at a meeting called for the purpose of voting
on such approval; provided, however, that if the continuance of
this Agreement is submitted to the shareholders of a Fund for
their approval and such shareholders fail to approve such
continuance of this Agreement as provided herein, the Adviser may
continue to serve hereunder in a manner consistent with the 1940
Act and the rules and regulations thereunder.
B. This Agreement may be terminated as to any Fund without the
payment of any penalty by vote of the Trustees or by vote of a
majority of the outstanding voting securities of such Fund at any
annual or special meeting or by the Adviser on sixty days'
written notice.
C. This Agreement shall automatically terminate in the event of its
assignment.
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9. Agreement and Declaration of Trust. A copy of the Trust's
Agreement and Declaration is on file with the Secretary of State
of the Commonwealth of Massachusetts, and notice is hereby given
that this instrument is executed by the Trustees as Trustees and
not individually, and that the obligations of this instrument are
not binding upon any of the Trustees, officers or shareholders
individually but are binding only upon the assets and property of
the Trust.
10. Other Agreements, etc. It is understood that any of the
shareholders, Trustees, officers and employees of the Trust may
be a shareholder, partner, director, officer or employee of, or
be otherwise interested in, the Adviser, and in any person
controlled by or under common control with the Adviser, and that
the Adviser and any person controlled by or under common control
with the Adviser may have an interest in the Trust. It is also
understood that the Adviser and persons controlled by or under
common control with the Adviser have and may have advisory,
management service or other contracts with other organizations
and persons, and may have other interests and businesses.
11. Miscellaneous. The Adviser, its directors, officers, and its
employees retain the right to engage in other business, and to
render portfolio management, investment advisory, or other
services of any kind to any other corporation, firm, individual,
or association. Neither the Adviser nor any officer, director, or
shareholder of the Adviser shall act as principal or receive any
compensation in connection with the purchase or sale of
securities by or on behalf of the Trust other than the
compensation provided in this Agreement.
The Adviser is an independent contractor and not an agent of the
Trust.
The Trust recognizes the Adviser's control of the names
"Allmerica Prime Trust" and "Allmerica Prime Fund" and agrees
that its right to use such names is non-exclusive and can be
terminated by the Adviser at any time. The use of such names will
be terminated automatically if at any time the Adviser or
affiliate of the Adviser ceases to be investment adviser for the
Trust.
For the purposes of this Agreement, majority of the outstanding
voting securities of a Fund at any annual or special meeting
shall mean a concurring vote of (i) 67% or more of the shares of
the Fund represented at such meeting, if more than 50% of the
outstanding shares of the Fund are represented in person or by
proxy, or (ii) 50% of the outstanding shares of the Fund,
whichever is less.
For the purposes of this Agreement, the terms "interested person"
and "assignment" shall have their respective meanings defined in
the 1940 Act, subject, however, to such exemptions as may be
granted by the SEC under said Act; the term "specifically approve
at least annually" shall be construed in a manner consistent with
the 1940 Act and the rules and regulations thereunder; and the
term "brokerage and research services" shall have the meaning
given in the Securities Exchange Act of 1934 and the rules and
regulations thereunder.
Each party hereto shall cooperate with each other party and all
appropriate governmental
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authorities (including without limitation the Securities and
Exchange Commission and the NASD) and shall permit such
authorities reasonable access to its books and records in
connection with any investigation or inquiry relating to this
Agreement or the transactions contemplated hereby.
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This Agreement shall be effective on the date executed. Executed this ____/th/
day of November ___, 2002.
ALLMERICA ASSET MANAGEMENT, INC.
/s/ By:
___________________________ _____________________________
Witness
ALLMERICA PRIME TRUST
/s/ By:
___________________________ _____________________________
Witness
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SCHEDULE A
COMPENSATION
Effective as of November___, 2002
As full compensation for the services furnished and expenses borne by the
Adviser herein, the Trust will pay a fee to the Adviser, computed and paid
monthly at an annual rate of the average daily net assets of each Fund, as
described below:
[INSERT FEE SCHEDULE]
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