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EXHIBIT 5(b)-8
SUB-ADVISER AGREEMENT
Sub-Adviser Agreement executed as of January 1, 1994 between SIERRA
INVESTMENT ADVISORS CORPORATION, a California corporation (the "Manager"), and
XXXXXXX, XXXXXXX & XXXXX, INC., a Delaware corporation (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 The Sierra
Variable Trust, a Massachusetts business trust (the "Trust") and to the overall
supervision of the Manager, the Sub- Adviser, at its expense, will furnish
continuously an investment program for the portfolio represented by shares of
The Short Term High Quality Bond Fund series (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, the By-laws of the Trust and the stated investment objectives, policies
and restrictions of the Fund as set forth in its registration statement on Form
N-1A, File No. 33-57732, and will use its best efforts to safeguard and promote
the welfare of the Fund, and to comply with other policies which the Trustees or
the Manager, as the case may be, may from time to time determine. Copies of the
Trust's Registration Statement, including exhibits, have been or will be
provided to the Sub-Adviser, and the Manager agrees promptly to provide the
Sub-Adviser with all amendments or supplements to the Registration Statement.
The Sub-Adviser shall make its officers and employees available to the Manager
at reasonable times to review investment policies of the Fund and to consult
with the Manager regarding the investment affairs of the Fund.
(b) The Sub-Adviser, at its expense, will furnish all necessary office
space and equipment, bookkeeping and clerical services (excluding shareholder
accounting and transfer agency services) required for it to perform its duties
hereunder and
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will pay all salaries, fees and expenses of officers and Trustees of the Trust
who are affiliated with the Sub-Adviser and not otherwise affiliated with the
Manager.
(c) In the selection of brokers, dealers, futures commissions merchants
or any other sources of portfolio investments for the Fund (hereafter, "brokers
or dealers") and the placing of orders for the purchase and sale of portfolio
investments for the Fund, the Sub-Adviser shall use its best efforts to obtain
the most favorable price and execution available, except to the extent it may be
permitted to pay higher brokerage commissions for brokerage and research
services as described below. In using its best efforts to obtain the most
favorable price and execution available, the Sub-Adviser, bearing in mind the
Fund's best interests at all times, shall consider all factors it deems
relevant, including by way of illustration, price, the size of the transaction,
the nature of the market for the security, the amount of the commission, the
timing of the transaction taking into account market prices and trends, the
reputation, experience and financial stability of the broker or dealer involved
and the quality of service rendered by the broker or dealer in other
transactions. Subject to such policies as the Trustees of the Trust 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, on behalf of the Fund, a broker or dealer
that provides brokerage and research services to the Sub-Adviser 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 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 Sub-Adviser's overall responsibilities with
respect to the Trust and to other clients of the Sub-Adviser as to which the
Sub-Adviser exercises investment discretion. As provided in the Management
Contract referred to in Section 3 below, the Trust agrees that any entity or
person associated with the Manager or Sub-Adviser which is a member of a
national securities exchange is authorized to effect any transaction on such
exchange for the account of the Fund which is permitted by Section 11(a) of the
Securities Exchange Act of 1934 and Rule 11a2-2(T) thereunder, and the Trust has
consented to the retention of compensation for such transactions in accordance
with Rule 11a2-2(T)(2)(iv).
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(d) The Sub-Adviser shall not be obligated to pay any expenses of or
for the Fund not expressly assumed by the Sub- Adviser pursuant to this Section
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(e) The Sub-Adviser shall maintain all books and records with respect
to the Fund's portfolio transactions required by subparagraphs (b)(5) - (b)(11)
and paragraph (f) of Rule 31a-1 under the Investment Company Act of 1940, as
amended, and shall render to the Board of Trustees of the Trust such periodic
and special reports as the Board may reasonably request.
2. OTHER AGREEMENTS, ETC.
The Trust understands that the Sub-Adviser now acts, will continue to
act and may act in the future as investment adviser to fiduciary and other
managed accounts and as investment adviser to one or more other investment
companies or series of investment companies, and the Trust has no objection to
the Sub-Adviser so acting, PROVIDED THAT whenever the Fund and one or more other
accounts or investment companies advised by the Sub-Adviser have available funds
for investment, investments suitable and appropriate for each will be allocated
in accordance with procedures believed to be equitable to each entity.
Similarly, opportunities to sell securities will be allocated in an equitable
manner. The Trust recognizes that in some cases this procedure may adversely
affect the size of the position that may be acquired or disposed of for the
Fund. In addition, the Trust understands that the persons employed by the
Sub-Adviser to assist the performance of the Sub-Adviser's duties hereunder will
not devote their full time to such service and nothing contained herein shall be
deemed to limit or restrict the right of the Sub- Adviser or any affiliate of
the Sub-Adviser to engage in and devote time and attention to other businesses
or to render services of whatever kind or nature.
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, computed and paid monthly at the annual rate of
0.15% of the value of the Fund's average daily net assets up to $200 million and
0.10% of the
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value of the Fund's average daily net assets over $200 million. Such average
daily net asset value of the Fund shall be determined by taking an average of
all of the determinations of such net asset value during such month at the close
of business on each business day during such month while this contract is in
effect. Such fee shall be payable for each month within 10 business days after
the end of such month.
Notwithstanding the foregoing, in the event that any reduction in the
fees paid to the Manager under the Management Contract shall be required as a
result of any statutory or regulatory limitation on investment company expenses,
there shall be a proportionate reduction in the fee payable to the Sub- Adviser
hereunder; PROVIDED THAT the Sub-Adviser will never be required to pay more than
the amount of fees it receives.
If the Sub-Adviser shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENTS OF THIS
CONTRACT.
This Agreement shall automatically terminate, without the payment of
any penalty, in the event of its assignment or in the event that the Management
Contract shall have terminated for any reason; and this Agreement shall not be
amended unless such amendment be approved at a meeting by the affirmative vote
of a majority of the outstanding shares 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 of the Trust 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 become effective upon its execution, and shall
remain in full force and effect continuously thereafter (unless terminated
automatically as set forth in Section 4) until terminated as follows:
(a) The Trust may at any time terminate this Agreement by not
more than sixty days' written notice delivered or mailed by registered
mail, postage prepaid, to the Manager
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and the Sub-Adviser, or
(b) If (i) the Trustees of the Trust or the shareholders by
the affirmative vote of a majority of the outstanding shares of the
Fund, and (ii) a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Manager or of the
Sub-Adviser, by vote cast in person at a meeting called for the purpose
of voting on such approval, do not specifically approve at least
annually the continuance of this Agreement, then this Agreement shall
automatically terminate as at the close of business on the second
anniversary of its execution, or upon the expiration of one year from
the effective date of the last such continuance, whichever is later;
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 Investment Company Act of 1940 and the Rules
and Regulations thereunder, or
(c) The Manager may at any time terminate this Agreement by
not less than sixty days' written notice delivered or mailed by
registered mail, postage prepaid, to the Sub-Adviser, and the
Sub-Adviser may at any time terminate this Agreement by not less than
90 days' written notice delivered or mailed by registered mail, postage
prepaid, to the Manager.
Action by the Trust under (a) above may be taken either (i) by vote of
a majority of its Trustees, or (ii) by the affirmative vote of a majority of the
outstanding shares of the Fund.
Termination of this Agreement pursuant to this Section 5 shall be
without the payment of any penalty.
6. CERTAIN INFORMATION.
The Sub-Adviser shall promptly notify the Manager in writing of the
occurrence of any of the following events: (a) the Sub- Adviser shall fail to be
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended from time
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to time, and under the laws of any jurisdiction in which the Sub- Adviser is
required to be registered as an investment adviser in order to perform its
obligations under this Agreement, (b) the Sub-Adviser shall have been served or
otherwise have notice of any action, suit, proceeding, inquiry or investigation,
at law or in equity, before or by any court, public board or body, involving the
affairs of the Trust and (c) there shall be any change in the control of the
Sub-Adviser.
7. CERTAIN DEFINITIONS.
For the purposes of this Agreement, the "affirmative vote of a majority
of the outstanding shares" of the Fund 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 or
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 "affiliated person",
"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 Exchange Act of 1934 and the Rules and Regulations thereunder.
8. NONLIABILITY OF SUB-ADVISER.
The Sub-Adviser shall exercise its best judgment in rendering its
services under this agreement. 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 the Fund, or to any shareholder of the Fund, for any
act or omission in the course of, or connected
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with, rendering services hereunder.
9. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Agreement and Declaration of Trust of the Trust is on
file with the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or shareholders individually
but are binding only upon the assets and property of the Fund.
IN WITNESS WHEREOF, SIERRA INVESTMENT ADVISORS CORPORATION and XXXXXXX,
XXXXXXX & XXXXX, INC. have each 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.
SIERRA INVESTMENT ADVISORS CORPORATION
By \s\ Xxxxxxx X. Goth
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Name: Xxxxxxx X. Goth
Title: Chief Operating Officer
XXXXXXX, XXXXXXX & XXXXX, INC.
By \s\ Xxxx Xxxxxxxx
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Name: Xxxx Xxxxxxxx
Title: Managing Director
Accepted and agreed to as of the day and year first above written:
THE SIERRA VARIABLE TRUST
By: \s\ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: Director, Executive Vice President
& Secretary
