FORM OF
SUB-ADVISER AGREEMENT
EXHIBIT 5(j)
SUB-ADVISER AGREEMENT executed as of ___________, 1998, between ALLMERICA
FINANCIAL INVESTMENT MANAGEMENT SERVICES, INC. (the "Manager"), and XXXX X.
XXXXX & CO., 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 the following
series of shares of the Trust: SELECT GROWTH AND INCOME FUND and such other
series of shares as the Trust, the Manager and the Sub-Adviser may from time to
time agree on (the "Fund"). The Sub-Adviser will make investment decisions on
behalf of the Fund 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 objective and policies of the Fund, as set forth in the current
Registration Statement of the Trust filed with the Securities and Exchange
Commission ("SEC") 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. 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 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 the Fund (excluding pricing and bookkeeping
services).
(c) The Sub-Adviser shall place all orders for the purchase and sale of
portfolio investment for the 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 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 to other clients of the Sub-
Adviser as to which the Sub-Adviser or any affiliate of the Sub-Adviser
exercises investment discretion.
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. 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, 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 OF 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 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, 1998, 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 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 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
2
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 the Fund without the payment of
any penalty by the Manager, by vote of the Trustees, or by vote of a majority of
the outstanding voting securities of the 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 between the Manager and the Trust 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 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.
For the purposes of this Agreement, the terms "control", interested person"
and "assignment" shall have their respective meanings defined in the 1940 Act
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 1940 Act 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 or
Fund, or to any shareholder of the Fund, for any act or omission in the course
of, or connected with, rendering services hereunder.
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 binding only upon the assets and
property of the Fund.
3
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 XXXX X. XXXXX & CO., 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:
----------------------------
Its:
----------------------------
XXXX X. XXXXX & CO., INC.
By:
----------------------------
Its:
----------------------------
Accepted and Agreed to as of the day and year first above written:
ALLMERICA INVESTMENT TRUST
By:
---------------------------
Its:
---------------------------
4
SCHEDULE A
----------
The Manager will pay to the Sub-Adviser, as full compensation for the Sub-
Adviser's services rendered, a quarterly fee, computed at an annual rate
based on the average daily net assets of the Fund, as set forth below:
Assets Rate
------ ----
First $100 Million 0.40%
Next $200 Million 0.25%
Over $300 Million 0.30%
5
