Exhibit 4(l)
SUB-ADVISER AGREEMENT
SUB-ADVISER AGREEMENT executed as of May 1, 2002, between Allmerica Financial
Investment Management Services, Inc. (the "Manager") and Xxxxxxx Xxxxx Asset
Management, a business unit of the Investment Management Division of Xxxxxxx,
Sachs & Co. (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 Core Equity 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"). With respect to the Fund,
the Sub-Adviser shall be responsible only for the Sub-Adviser's
Portion and the Sub-Adviser shall have no responsibility for remaining
portion(s) or segment(s) of the Fund and the Sub-Adviser shall not be
responsible for any costs, expenses, or liabilities arising from any
portion of the Fund other than the Sub-Adviser's Portion . The
Sub-Adviser will make investment decisions on behalf of the
Sub-Adviser's Portion and place all orders for the purchase and sale
of portfolio securities and instruments. 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 Manager
and the Sub-Adviser agree that the Sub-Adviser shall treat 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 current
Registration Statement of the Trust filed with the SEC and any
applicable federal and state laws, including, without limitation U.S.
tax laws, and other policies which the Trustees of the Trust or the
Manager may furnish to the Sub-Adviser, provided that with respect to
procedures governing transactions involving affiliates (such as those
adopted pursuant to the Investment Company Act of 1940 ("1940 Act")
Rule 17a-7, 17e-1 and 10f-3), such procedures will identify any
affiliate of the Manager and the Fund, other than affiliates of the
Manager. The Sub-Adviser shall not bear any responsibility and shall
be released from any obligation or cost which results from entering
into a trade pursuant to the Fund's Rule 17a-7, 17e-1 or 10f-3
procedures with any affiliated entity, other than affiliates of the
Manager, not specifically identified to the Sub-Adviser by the
Manager. 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 Fund with issuers, brokers, dealers and,
to the extent applicable, Futures Commission Merchants ("FCM")
selected by the Sub-Adviser which may include brokers, dealers or
FCM's affiliated with the Sub-Adviser. In the selection of such
brokers, or dealers or FCM's and the placing of such orders, the
Sub-Adviser always shall seek best execution. 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 Manager hereby agrees and consents that the Sub-Adviser and its
affiliates are authorized to execute agency cross transactions
(collectively "Cross transactions") for the Fund provided such
transactions comply with the Rule 206(3)-2 under the Investment
Advisers Act of 1940 ("Advisers Act"), Rule 17e-1 under the 1940 Act
and any other applicable laws or regulations. Cross transactions are
transactions which may be effected by the Sub-Adviser or its
affiliates acting for both the Fund and the counterparty to the
transaction. Cross transactions enable the Sub-Adviser to purchase or
sell a block of securities for an account at a set price and possibly
avoid an unfavorable price movement that may be created through
entrance into the market with such purchase or sell order. However,
the Manager should note that the Sub-Adviser has a potentially
conflicting division of loyalties and responsibilities regarding both
parties to Cross transactions and that the Sub-Adviser, or any of its
affiliates, if acting as broker, may receive commissions from both
parties to such transactions. The Manager understands that its
authority as the Sub-Adviser to execute Cross transactions for the
Account is terminable at will without penalty, effective upon receipt
by the Sub-
2
Adviser of written notice from the Fund, and that the failure to
terminate such authorization will result in its continuation.
In connection with any agency Cross transactions, the Sub-Adviser
will provide the Fund with a confirming letter describing the details
of such trades, and other reports or information that the Fund may
reasonably request. Upon request, the Sub-Adviser will disclose to
the Fund the commissions received by the Sub-Adviser or its
affiliates for executing the other side of the transaction.
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 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.
It is understood that the name "Xxxxxxx, Xxxxx & Co." or "Xxxxxxx Sachs" or
any derivative thereof, any tradename, trademark, trade device, service
xxxx, symbol or logo associated with those name are the valuable property
of the Sub-Adviser and that the Manager has the right to use such name (or
derivative or logo), in offering materials or promotional or sales-related
materials of the Fund, only with the prior written approval of the
Sub-Adviser and for so long as the Sub-Adviser is Sub-Adviser of the Fund.
Notwithstanding the foregoing, the Sub-Adviser's approval is not required
when (i) previously approved materials are re-issued with minor
modifications, or (ii) the Manager and the Sub-Adviser identify materials
which they jointly determine do not require the Sub-Adviser's approval.
Upon termination of this Agreement, the Fund and the Manager shall
forthwith cease to use such name (or derivative or logo).
3
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, 2003 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 "Xxxxxxx Sachs" or "Xxxxxxx Xxxxx Asset Management" 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 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 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
4
the rules and regulations thereunder.
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.
9. REPRESENTATION OF SUB-ADVISER AND THE MANAGER. The Sub-Adviser and the
Manager each represent, warrant, and agree as follows:
(a) Each of the Sub-Adviser and the Manager: (i) is 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) is
not prohibited by the 1940 Act or the Advisers Act from performing the
services contemplated by this Agreement; (iii) has met, and will
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
organization, necessary to be made in order to perform the services
contemplated by this Agreement; (iv) has the authority to enter into
and perform the services contemplated by this Agreement; and (v) will
immediately notify the other party to the Agreement of the occurrence
of any event that would disqualify it from serving as an investment
adviser of any investment company pursuant to Section 9(a) of the 1940
Act or otherwise.
(b) The Sub-Adviser and the Manager each has adopted a written code of
ethics complying with the requirements of Rule 17j-1 under the 1940
Act.
(c) The Manager represents and warrants that the Trust (including the
Fund) is duly registered as an open-end investment company under the
1940 Act and shall promptly notify the Sub-Adviser if the Trust
(including the Fund) is no longer so registered or covered by an
applicable exemption from registration.
10. The Manager and Trust administrator (currently Investors Bank & Trust
Company) will perform the tax diversification tests for the Fund required
under Subchapter M and Section 817(h) of the Internal Revenue Code ("IRC")
and will take reasonable steps to comply with
5
those provisions. In the event that the Manager becomes aware that the Fund
is not in compliance with the diversification standards of Subchapter M or
Section 817(h) of the IRC, the Manager shall promptly notify the
Sub-Adviser so the Sub-Adviser will have a reasonable opportunity to cure
the deficiency within the time permitted under Subchapter M or Section
817(h), as the case may be.
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 Xxxxxxx Xxxxx Asset Management, a business unit of
the Investment Management Division of Xxxxxxx, Sachs & Co. 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.
/s/ Xxxx X. Xxxxxxxxx
By: ______________________________________
Vice President
Title: ___________________________________
XXXXXXX SACHS ASSET MANAGEMENT,
a unit of the Investment Management Division of
Xxxxxxx, Xxxxx & Co.
/s/ Xxxx Xxxxx
By: ______________________________________
Managing Director
Title: ___________________________________
Accepted and Agreed to as of the day and year first above written:
ALLMERICA INVESTMENT TRUST
/s/ Xxx X. Xxxxx
By: ______________________________________
Vice President
Title: ______________________________________
6
SCHEDULE A
For purposes of calculating fees under this Sub-Adviser Agreement, the assets of
the Sub-Adviser's Portion of the Fund shall be aggregated with the portion of
the assets of any other affiliated accounts of the Manager managed by the
Sub-Adviser in a similar investment mandate (together, the "Aggregated Assets").
The "Aggregated Assets" will be applied to the following schedule and the
resulting fee shall be prorated back to the Fund and other affiliated accounts
accordingly.
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 average daily net assets of the Aggregated Assets,
under the following schedule:
NET ASSETS FEE RATE
---------- ---------
First $300 million 0.30%
Over $300 million 0.25%
The average daily net assets of the Aggregate Assets 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.
7
