FORM OF
SUB-ADVISER AGREEMENT EXHIBIT 5(k)
SUB-ADVISER AGREEMENT executed as of ___________, 1998 between ALLMERICA
FINANCIAL INVESTMENT MANAGEMENT SERVICES, INC. (the "Manager"), and XXXXXXXX,
XXXX & XXXX, INC. (the "Sub-Adviser").
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 of the Trustees of Allmerica Investment
Trust (the "Trust"), a Massachusetts business trust, the Sub-Adviser, at its
expense, will furnish continuously an investment program for each of the
following series of shares of the Trust: Select Income 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 will make investment
decisions on behalf of each of the Funds and place all orders for the purchase
and sale of portfolio securities. In the performance of its duties, the Sub-
Adviser will comply with the provisions of the Agreement and Declaration of
Trust and Bylaws of the Trust and the objectives and policies of each of the
Funds, as set forth in the current Registration Statement of the Trust filed
with the Securities and Exchange Commission and any applicable federal and state
laws, and 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
in writing. 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 Funds and to consult with the Manager regarding the investment affairs of
the Funds.
(b) The Sub-Adviser, at its expense, will furnish (i) all necessary
investment and management facilities, including salaries of personnel required
for it to execute its duties faithfully, and (ii) administrative facilities,
including clerical personnel and equipment necessary for the efficient conduct
of the investment affairs of each of the Funds (excluding pricing and
bookkeeping services).
(c) The Sub-Adviser shall place all orders for the purchase and sale of
portfolio investments for each Fund 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 each 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 to other clients of the Sub-
Adviser as to which Sub-Adviser or any affiliate of the Sub-Adviser exercises
investment discretion.
(d) The Sub-Adviser shall not be obligated to pay any expenses of or for a
Fund not expressly assumed by the Sub-Adviser pursuant to this Section 1.
2. 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 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. It is also 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.
3. 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 and for the expenses borne by the Sub-Adviser
pursuant to Section 1, 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.
4. AMENDMENTS TO THIS AGREEMENT
This Agreement (including Schedule A 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, 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.
5. 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 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 May 30, 1998, and shall continue in full
force and effect for successive periods of one year thereafter, but
only so long as each such continuance
2
is approved annually (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 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 a 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 Investment Company Act of 1940, as amended
("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 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 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 shall have terminated for any reason.
6. 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 a 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.
For the purposes of this Agreement, the terms "control", "interested
person" and "assignment" shall have their respective meanings defined in the
Investment Company Act of 1940 and the Rules and Regulations thereunder,
subject, however, to such exemptions as may be granted by the Securities and
Exchange Commission under said Act; the term "specifically approve at least
annually" shall be construed in a manner consistent with the Investment Company
Act of 1940 and the Rules and Regulations thereunder; and the term "brokerage
and research services" shall have the meaning given in the Securities and
Exchange Act of 1934 and the Rules and Regulations thereunder.
7. NONLIABILITY OF SUB-ADVISER
In the absence of willful misfeasance, bad faith or gross negligence on the
part of the Sub-Adviser, or reckless disregard of its obligations and duties
hereunder, the Sub-Adviser shall not be subject to any liability to the Trust,
to any shareholder of the Trust or to the Manager, for any act or omission in
the course of, or connected with, rendering services hereunder.
3
8. 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.
4
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 XXXXXXXX, XXXX & XXXX, INC. 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:
---------------------------------
Title:
---------------------------------
XXXXXXXX, AYER & WOOD, INC.
By:
---------------------------------
Title:
---------------------------------
Accepted and Agreed to as of the day and year first above written:
ALLMERICA INVESTMENT TRUST
By:
-------------------------------
Title:
-------------------------------
5
SCHEDULE A
----------
The Manager will pay to the Sub-Adviser as compensation for the Sub-
Adviser's services rendered and for the expenses borne by the Sub-Adviser
pursuant to Section 1, a fee, computed daily at an annual rate of .20% based on
the average daily net assets of each Fund. Such fee will be paid to the Sub-
Adviser after the end of each calendar quarter.
6
