EXHIBIT 5(e)
FORM OF
SUB-ADVISER AGREEMENT
SUB-ADVISER AGREEMENT executed as of __________, 1998 between ALLMERICA
FINANCIAL INVESTMENT MANAGEMENT SERVICES, INC. (the "Manager") and XXXXXX
XXXXXXXXX XXXXXXX, LLC (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: the SMALL-MID CAP VALUE 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 will make
investment decisions on behalf 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 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
and which are furnished 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 Funds. 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 to perform for
it 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 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 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 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.
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:
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(a) Unless terminated as herein provided, this Agreement shall remain in
full force and effect through January 2, 2000, 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 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, 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.
(d) In the event of termination of this agreement, the Fund will no longer
use the name "Xxxxxx Xxxxxxxxx XxXxxxx, Inc." or "Xxxxxx Xxxxxxxxx XxXxxxx, LLC"
in materials relating to the Fund except as may be required by the 1940 Act and
the rules and regulations thereunder.
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
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 Securities Exchange Act
of 1934 and the rules and regulations thereunder.
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7. NON-LIABILITY OF SUB-ADVISER
The Sub-Adviser shall be under no liability to the Trust, the Manager or
the Trust's Shareholders or creditors for any matter or thing in connection with
the performance of any of the Sub-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 Sub-
Adviser against any liability to the Trust by reason of the Sub-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.
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.
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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 XXXXXX XXXXXXXXX XXXXXXX, LLC 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: -------------------------------
XXXXXX XXXXXXXXX XXXXXXX, LLC
By: -------------------------------
Title: ------------------------------
Accepted and Agreed to as of the day and year first above written:
ALLMERICA INVESTMENT TRUST
By: _________________________________
Title: ________________________________
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SCHEDULE A
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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 of the average daily net assets of the Fund as described below:
NET ASSETS FEE 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%
The average daily net assets of the 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 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.
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