THE SIERRA VARIABLE TRUST
INVESTMENT MANAGEMENT AGREEMENT
INVESTMENT MANAGEMENT AGREEMENT (this "Agreement"), dated January 30, 1998,
between The Sierra Variable Trust, a Massachusetts business trust, (the
"Trust"), on behalf of each of its series which are listed on the signature page
of this Agreement (each referred to herein as a "Fund" and collectively the
"Funds") and Composite Research & Management Co., a Washington corporation (the
"Manager").
W I T N E S S E T H
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WHEREAS, the Trust is an open-end series management investment company,
registered under the Investment Company Act of 1940 (the "1940 Act"); and
WHEREAS, the Trust, desires to retain the Manager to render investment
management services to each Fund, and the Manager is willing to render such
services;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto agree as follows:
1. Appointment. The Trust hereby appoints the Manager to act as investment
manager to each Fund for the period and on the terms set forth in this
Agreement. The Manager accepts such appointment and agrees to render the
services herein described, for the compensation herein provided.
2. Management. Subject to the supervision of the Board of Trustees of the
Trust, the Manager shall manage the investment operations of each Fund and the
composition of each Fund's portfolio, including the purchase, retention and
disposition of securities therefor, in accordance with such Fund's investment
objectives, policies and restrictions as stated in the Prospectus and Statement
of Additional Information (as such terms are hereinafter defined) and
resolutions of the Trust's Board of Trustees and subject to the following
understandings:
(a) The Manager shall provide supervision of each Fund's investments,
furnish a continuous investment program for each Fund's portfolio and
determine from time to time what securities will be purchased, retained, or
sold by each Fund, and what portion of the assets will be invested or held
as cash.
(b) The Manager, in the performance of its duties and obligations under
this Agreement, shall act in conformity with the Agreement and Declaration
of Trust of the Trust and the investment policies of the Funds as
determined by the Board of Trustees of the Trust.
(c) The Manager shall determine the securities to be purchased or sold by
each Fund and shall place orders for the purchase and sale of portfolio
securities, pursuant to its determinations, with brokers or dealers
selected by the Manager. In executing
portfolio transactions and selecting brokers or dealers, the Manager shall
use its best efforts to seek on behalf of each Fund the best overall terms
available. In assessing the best overall terms available for any
transaction, the Manager may consider all factors it deems relevant,
including the breadth of the market in the security, the price of the
security, the size of the transaction, the timing of the transaction, the
reputation, financial condition, experience, and execution capability of a
broker or dealer, the amount of commission, and the value of any brokerage
and research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934), provided by a broker or dealer. The
Manager is authorized to pay to a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for a Fund which is in excess of the amount of commission
another broker or dealer would have charged for effecting the transaction
if the Manager determines in good faith that such commission was reasonable
in relation to the value of the brokerage and research services provided by
such broker or dealer, viewed in terms of that particular transaction or in
terms of the overall responsibilities of the Manager to the Fund and/or
other accounts over which the Manager exercises investment discretion.
(d) On occasions when the Manager deems the purchase or sale of a security
to be in the best interest of a Fund as well as other fiduciary accounts
for which it has investment responsibility, the Manager, to the extent
permitted by applicable laws and regulations, may aggregate the securities
to be so sold or purchased in order to obtain the best execution, most
favorable net price or lower brokerage commissions.
(e) Subject to the provisions of the Agreement and Declaration of Trust of
the Trust and the 1940 Act, the Manager, at its expense, may select and
contract with one or more investment sub-advisers (the "sub-adviser") for
each Fund to perform some or all of the services for which it is
responsible pursuant to this Section 2. The Manager shall be solely
responsible for the compensation of any sub-adviser of a Fund for its
services to such Fund. The Manager may terminate the services of any sub-
adviser at any time in its sole discretion, and shall, at such time, assume
the responsibilities of such sub-adviser unless and until a successor sub-
adviser is selected. To the extent that more than one sub-adviser is
selected, the Manager shall, in its sole discretion, determine the amount
of the Fund's assets allocated to each such sub-adviser.
3. Services Not Exclusive. The investment management services rendered by the
Manager hereunder to the Funds are not to be deemed exclusive, and the Manager
shall have the right to render similar services to others, including, without
limitation, other investment companies.
4. Expenses. During the term of this Agreement, the Manager shall pay all
expenses incurred by it in connection with its activities under this Agreement
including the salaries and expenses of any of the officers or employees of the
Manager who act as officers, Trustees or employees of the Trust but excluding
the cost of securities purchased for the Funds and the amount of any brokerage
fees and commissions incurred in executing portfolio transactions for the Funds,
and shall provide the Funds with suitable office space. Other expenses to be
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incurred in the operation of the Funds (other than those borne by any third
party), including without limitation, taxes, interest, brokerage fees and
commissions, fees of Trustees who are not officers, directors, or employees of
the Manager, federal registration fees and state Blue Sky qualification fees,
administration fees, bookkeeping, charges of custodians, transfer and dividend
disbursing agents' fees, certain insurance premiums, industry association fees,
outside auditing and legal expenses, costs of maintaining the Funds' or the
Trust's existence, costs of independent pricing services, costs attributable to
investor services (including, without limitation, telephone and personnel
expenses), costs of preparing, printing and distributing prospectuses to
existing shareholders, costs of stockholders' reports and meetings of
shareholders and Trustees of the Funds or the Trust, as applicable, and any
extraordinary expenses will be borne by the Funds.
5. Compensation. For the services provided pursuant to this Agreement, the
Trust shall pay to the Manager as full compensation therefor a monthly fee
computed on the average daily net assets at the annual rate for each Fund as
stated in Schedule A attached hereto. The Trust acknowledges that the Manager,
as agent for the Funds, will allocate a portion of the fee equal to the sub-
advisory fee payable to the sub-advisor, if any, under its sub-advisory
agreement to the sub-advisor for sub-advisory services. The Trust acknowledges
that the Manager, as agent for the Funds, may allocate a portion of the fee to
Xxxxxxx Xxxxx Securities Services, Inc. for administrative services, portfolio
accounting and regulatory compliance systems. The Manager also from time to
time and in such amounts as it shall determine in its sole discretion may
allocate a portion of the fee to Composite Funds Distributor, Inc. for
facilitating distribution of the Funds. This payment would be made from revenue
which otherwise would be considered profit to the Manager for its services.
This disclosure is being made to the Trust solely for the purpose of conforming
with requirements of the Washington Department of Revenue for exclusion of
revenue from the Washington Business and Occupation Tax.
6. Limitation of Liability. The Manager shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Trust in connection
with the matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement.
7. Delivery of Documents. The Trust has heretofore delivered to the Manager
true and complete copies of each of the following documents and shall promptly
deliver to it all future amendments and supplements thereto, if any:
(a) Agreement and Declaration of Trust as presently in effect and as
amended from time to time;
(b) Bylaws of the Trust;
(c) Registration Statement under the Securities Act of 1933 and under the
1940 Act of the Trust on Form N-1A, and all amendments thereto, as filed
with the Securities
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and Exchange Commission (the "Registration Statement") relating to the
Trust and the shares of the Funds;
(d) Notification of Registration of the Trust under the 1940 Act on Form
N-8A;
(e) Prospectuses of the Trust relating to shares of the Funds (such
prospectuses as presently in effect and/or as amended or supplemented from
time to time, the "Prospectus"); and
(f) Statement of Additional Information of the Trust relating to shares of
the Funds (such statement as presently in effect and/or as amended or
supplemented from time to time, the "Statement of Additional Information").
8. Duration and Termination. This Agreement shall become effective as of the
date first above-written for an initial period of two years and shall continue
thereafter so long as such continuance is specifically approved at least
annually (a) by the vote of the Board of Trustees including a majority of those
members of the Trust's Board of Trustees who are not parties to this Agreement
or "interested persons" of any such party, cast in person at a meeting called
for that purpose, or by vote of a majority of the outstanding voting securities
of each Fund. Notwithstanding the foregoing, (a) this Agreement may be
terminated with respect to any Fund at any time, without the payment of any
penalty, by either the Trust (by vote of the Trust's Board of Trustees or by
vote of a majority of the outstanding voting securities of the Fund) or the
Manager, on sixty (60) days prior written notice to the other and (b) shall
automatically terminate in the event of its assignment. As used in this
Agreement, the terms "majority of the outstanding voting securities,"
"interested persons" and "assignment" shall have the meanings assigned to such
terms in the 1940 Act.
9. Amendments. No provision of this Agreement may be amended, modified,
waived or supplemented except by a written instrument signed by the party
against which enforcement is sought. No amendment of this Agreement shall be
effective until approved in accordance with any applicable provisions of the
1940 Act.
10. Use of Name and Logo. The Trust agrees that it shall furnish to the
Manager, prior to any use or distribution thereof, copies of all prospectuses,
statements of additional information, proxy statements, reports to stockholders,
sales literature, advertisements, and other material prepared for distribution
to stockholders of the Trust or to the public, which in any way refer to or
describe the Manager or which include any trade names, trademarks or logos of
the Manager or of any affiliate of the Manager. The Trust further agrees that
it shall not use or distribute any such material if the Manager reasonably
objects in writing to such use or distribution within five (5) business days
after the date such material is furnished to the Manager.
The Manager and/or its affiliates own the names "Sierra", "Composite" and
any other names which may be listed from time to time on a Schedule B to be
attached hereto that they may develop for use in connection with the Trust,
which names may be used by the Trust only
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with the consent of the Manager and/or its affiliates. The Manager, on behalf of
itself and/or its affiliates, consents to the use by the Trust of such names or
any other names embodying such names, but only on condition and so long as (i)
this Agreement shall remain in full force, (ii) the Fund and the Trust shall
fully perform, fulfill and comply with all provisions of this Agreement
expressed herein to be performed, fulfilled or complied with by it, and (iii)
the Manager is the manager of each Fund of the Trust. No such name shall be used
by the Trust at any time or in any place or for any purposes or under any
conditions except as provided in this section. The foregoing authorization by
the Manager, on behalf of itself and/or its affiliates, to the Trust to use such
names as part of a business or name is not exclusive of the right of the Manager
and/or its affiliates themselves to use, or to authorize others to use, the
same; the Trust acknowledges and agrees that as between the Manager and/or its
affiliates and a Fund or the Trust, the Manager and/or its affiliates have the
exclusive right so to use, or authorize others to use, such names, and the Trust
agrees to take such action as may reasonably be requested by the Manager, on
behalf of itself and/or its affiliates, to give full effect to the provisions of
this section (including, without limitation, consenting to such use of such
names). Without limiting the generality of the foregoing, the Trust agrees that,
upon (i) any violation of the provisions of this Agreement by the Trust or (ii)
any termination of this Agreement, by either party or otherwise, the Trust will,
at the request of the Manager, on behalf of itself and/or its affiliates, made
within six months after such violation or termination, use its best efforts to
change the name of the Trust so as to eliminate all reference, if any, to such
names and will not thereafter transact any business in a name containing such
names in any form or combination whatsoever, or designate itself as the same
entity as or successor to an entity of such names, or otherwise use such names
or any other reference to the Manager and/or its affiliates, except as may be
required by law. Such covenants on the part of the Trust shall be binding upon
it, its Trustees, officers, shareholders, creditors and all other persons
claiming under or through it.
The provisions of this section shall survive termination of this Agreement.
11. Notices. Any notice or other communication required to be given pursuant
to this Agreement shall be deemed duly given if delivered or mailed by
registered mail, postage prepaid, if to the Trust: 000 X. Xxxx Xxx., Xxxxx 000,
Xxxxxxx, Xxxxxxxxxx 00000; or if to the Manager: 0000 Xxxxx Xxxxxx, Xxxxx
0000, Xxxxxxx, Xxxxxxxxxx 00000; or to either party at such other address as
such party shall designate to the other by a notice given in accordance with the
provisions of this section.
12. Miscellaneous.
(a) Except as otherwise expressly provided herein or authorized by the
Board of Trustees of the Trust from time to time, the Manager for all
purposes herein shall be deemed to be an independent contractor and shall
have no authority to act for or represent the Trust in any way or otherwise
be deemed an agent of the Trust.
(b) The Trust shall furnish or otherwise make available to the Manager
such information relating to the business affairs of the Trust as the
Manager at any time or from time to time reasonably requests in order to
discharge its obligations hereunder.
(c) This Agreement shall be governed by and construed in accordance with
the laws of The Commonwealth of Massachusetts and shall inure to the
benefit of the parties hereto and their respective successors.
(d) If any provision of this Agreement shall be held or made invalid or by
any court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
13. Agreement and Declaration of Trust and Limitation of Liability. A copy of
the Agreement and Declaration of Trust of the Trust is on file with the
Secretary of State of The Commonwealth of Massachusetts, and notice is hereby
given that this Agreement is executed by an officer of the Trust on behalf of
the Trustees of the Trust, as trustees and not individually, on further behalf
of the Funds, and that the obligations of this Agreement shall be binding upon
the assets and properties of each Fund, individually, and shall not be binding
upon the assets and property of any other Fund or series of the Trust or upon
any of the Trustees, officers, employees, agents or shareholders of the Funds or
the Trust individually.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the date first above-written.
THE SIERRA VARIABLE TRUST, on behalf of its
series
SHORT TERM HIGH QUALITY BOND FUND,
GROWTH FUND,
EMERGING GROWTH FUND ,
INTERNATIONAL GROWTH FUND,
GLOBAL MONEY FUND,
U.S. GOVERNMENT FUND,
CORPORATE INCOME FUND,
GROWTH AND INCOME FUND,
CAPITAL GROWTH PORTFOLIO,
GROWTH PORTFOLIO,
BALANCED PORTFOLIO,
VALUE PORTFOLIO, and
INCOME PORTFOLIO
By: /s/ XXXXX XXXXX
----------------------------------
Name: XXXXX XXXXX
Title: PRESIDENT
Attest:
By: /s/ XXXXXXX X. GOTH
-----------------------------------
Name: XXXXXXX X. GOTH
Title: SENIOR VICE PRESIDENT
COMPOSITE RESEARCH &
MANAGEMENT CO.
By: /s/ XXXXXXX X. XXXXXX
-----------------------------------
Xxxxxxx X. Xxxxxx
President
Attest:
By: /s/ XXXXXX X. XXXXXXX
-----------------------------------
Xxxxxx X. Xxxxxxx
Secretary
SCHEDULE A
THE SIERRA VARIABLE TRUST
INVESTMENT MANAGEMENT AGREEMENT
The fees to be charged to The Sierra Variable Trust for services provided under
this Agreement (including any sub-advisory fees) are as follows:
FIRST OVER
$500M $500M
------- -------
Global Money Fund ................. 0.500% 0.400%
U.S. Government Fund .............. 0.600% 0.500%
Corporate Income Fund ............. 0.650% 0.500%
FIRST OVER
$ 25M $ 25M
------ ------
Growth Fund ....................... 0.950% 0.875%
FIRST $200M- OVER
$200M $500M $500M
------ ------ ------
Short-Term High Quality Bond Fund . 0.500% 0.450% 0.400%
FIRST $25M- OVER
$25M $500M $500M
------ ------ ------
Emerging Growth Fund .............. 0.900% 0.850% 0.750%
FIRST $50M- OVER
$50M $125M $125M
------ ------ ------
International Growth Fund ......... 0.950% 0.850% 0.750%
FIRST $100M- $200M- $400M- OVER
$100M $200M $400M $500M $500M
------ ------ ------ ------ ------
Growth & Income Fund .............. 0.800% 0.750% 0.700% 0.650% 0.575%
ALL ASSET LEVELS
-----------------
Capital Growth Portfolio ......... 0.10%
Growth Portfolio ................. 0.10%
Balanced Portfolio ............... 0.10%
Value Portfolio .................. 0.10%
