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EXHIBIT 5(b)-9
SUB-ADVISER AGREEMENT
This Agreement is made and entered into this 1st day of
January, 1994, by and between Sierra Investment Advisors Corporation (the
"Manager"), a corporation organized under the laws of the state of California
and Janus Capital Corporation (the "Sub-Adviser"), a corporation organized under
the laws of the state of Colorado.
WITNESSETH:
WHEREAS, the Manager is engaged in the business of rendering
investment advisory and management services, is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended (the "Advisers
Act"), and is the investment adviser to the Emerging Growth Fund of The Sierra
Variable Trust (the "Trust"), an unincorporated business trust organized under
the laws of the Commonwealth of Massachusetts pursuant to a Management Contract,
dated as of January 1, 1994, between the Manager and the Trust (the "Management
Contract"); and
WHEREAS, the Trust is engaged in business as an open-end,
management investment company and is so registered under the Investment Company
Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust offers a number of investment portfolios,
each with its own investment objective and strategies, and of which one
investment portfolio is the Emerging Growth Fund (the "Fund"); and
WHEREAS, the Sub-Adviser is engaged in the business of
rendering investment advisory and management services and is registered as an
investment adviser under the Investment Advisers Act of 1940, as amended (the
"Advisers Act"); and
WHEREAS, the Manager is authorized to retain sub-
advisers and desires to retain the Sub-Adviser to furnish
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investment advisory and management services to the Fund and the Sub-Adviser is
willing to furnish such services;
NOW, THEREFORE, in consideration of the mutual agreements
herein contained, it is hereby agreed by and among the parties hereto as
follows:
1. Investment Description; Appointment
The Manager desires to employ and hereby appoints the
Sub-Adviser to act as investment sub-adviser to the Fund. The Sub-Adviser
accepts the appointment and agrees to furnish the services described herein for
the compensation set forth below.
In performance of its duties, the Sub-Adviser will comply
with the limitations specified in its Agreement and Declaration of Trust, the
By-laws of the Trust and the stated investment objectives, policies and
restrictions of the Fund as forth in the Trust's Registration Statement on Form
N-1A, File No. 33-57732, as in effect and which may be amended from time to time
(the "Registration Statement"), and in such manner and to such extent as may
from time to time be approved by the Board of Trustees of the Trust. Copies of
the Registration Statement, have been or will be submitted to the Sub-Adviser.
Copies of all amendments or supplements to the Trust's Registration Statement
and the Trust's Declaration and Agreement of Trust will be provided to the
Sub-Adviser during the continuance of this Agreement before or at the time such
amendments or supplements become effective.
The Manager agrees to furnish the Sub-Adviser with minutes of
meetings of the Board of Trustees of the Fund to the extent they may affect the
duties of the Sub-Adviser, a certified copy of any financial statements or
reports prepared for the Trust which relate to the Fund, by certified or
independent public accountants, and with copies of any financial statements or
reports made by the Trust to its shareholders or to any governmental body or
securities exchange, and any further materials or information which the
Sub-Adviser may reasonably
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request to enable it to perform its functions under this Agreement.
2. Services as Investment Sub-Adviser
Subject to the supervision of the Board of Trustees of the
Trust and of the Manager, the Fund's investment adviser, the Sub-Adviser will
(a) maintain compliance procedures for the Fund that the Sub-Adviser believes
are adequate to ensure its compliance with the applicable provisions of the 1940
Act and the Advisers Act as the same may from time to time be amended, (b) make
investment decisions for the Fund in accordance with the Fund's investment
objective(s) and policies as stated in the Fund's Registration Statement as in
effect and, after notice to the Sub-Adviser, and which may be amended from time
to time, (c) place purchase and sale orders on behalf of the Fund to effectuate
the investment decisions made, (d) maintain books and records with respect to
the securities transactions of the Fund in accordance with the 1940 Act and the
Advisers Act and the rules adopted thereunder and will furnish the Manager
quarterly, annual and special reports as the Manager may reasonably request; and
(e) treat confidentially and as proprietary information of the Trust, all
records and other information relative to the Trust and prior, present or
potential shareholders; and will not knowingly use such records and information
for any purpose other than performance of its responsibilities and duties
hereunder, except after prior notification to and approval in writing by the
Trust, which approval shall not be unreasonably withheld and such records may
not be withheld where the Sub-Adviser may be exposed to civil or criminal
contempt proceedings for failure to comply, when requested to divulge such
information by duly constituted authorities, or when so requested by the Trust.
In providing those services, the Sub-Adviser will supervise the Fund's
investments and conduct a continual program of investment, evaluation and, if
appropriate, sale and reinvestment of the Fund's assets.
Subject to the supervision of the Manager and in accordance
with the investment objective and policies as stated in the Trust's Registration
Statement, the Sub-Adviser is authorized, in its discretion and without prior
consultation with the Manager to buy, sell, lend, and otherwise trade in any
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stocks, bonds, and other securities and investment instruments on behalf of the
Fund, without regard to the length of time the securities have been held and the
resulting rate of portfolio turnover or any tax considerations, and so long as
consistent with the foregoing, the majority or the whole of the Fund may be
invested in such proportions of stocks, bonds, other securities or investment
instruments, or cash as the Sub-Adviser shall determine. In addition, the
Sub-Adviser will furnish the Fund or the Manager with whatever statistical
information the Fund or the Manager may reasonably request with respect to the
instruments that the Fund may hold or contemplate purchasing.
3. Brokerage
Subject to (i) the over-riding objective of obtaining the best
possible execution of orders; and (ii) review and approval of the Board of
Trustees of the Trust, which may be conducted as often as quarterly, the
Sub-Adviser shall place all orders for the purchase and sale of investments for
the Fund with brokers, dealers, futures commissions merchants, or other sources
(hereafter, "brokers or dealers") selected by the Sub-Adviser, which may include
brokers or dealers affiliated with the Sub- Adviser. All transactions with any
affiliated person of the Trust, or where any such affiliated person acts as
broker or agent in connection with any such transaction, shall be accomplished
in compliance with the 1940 Act, the Advisers Act, the Securities Exchange Act
of 1934, as amended, the rules adopted thereunder and the procedures adopted
thereunder by the Trust. As provided in the Management Contract, 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 the
transactions in accordance with Rule 11a2-2(T)(2)(iv). Purchase or sell orders
for the Fund may be aggregated with contemporaneous purchase or sell orders of
other clients of the Sub-Adviser; provided that (i) no advisory account will be
favored by the Sub-Adviser over any other account; (ii) each client of the
Sub-Advisor who participates in such an aggregated order will participate at the
average share price, with all
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transaction costs shared on a pro rata basis; (iii) only advisory clients'
transactions will be aggregated for such an aggregated order; and (iv) the
accounts of clients whose orders are aggregated will be segregated on the
Sub-Adviser's books and records so as to identify the particular client who has
the beneficial interest therein. The Sub-Adviser shall use its best efforts to
obtain execution of Fund transactions at prices which are advantageous to the
Fund and at commission rates that are reasonable in relation to the benefits
received. However, the Sub-Adviser may select brokers or dealers on the basis
that they provide brokerage, research, or other services or products to the Fund
and/or other accounts serviced by the Sub-Adviser. The Sub- Adviser may pay a
broker or dealer an amount of commission for effecting a securities transaction
in excess of the amount of commission or dealer spread 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 products and/or services provided by such
broker or dealer. This determination, with respect to brokerage and research
services or products, may be viewed in terms of either that particular
transaction or the overall responsibilities which the Sub-Adviser and its
affiliates have with respect to the Fund and to accounts over which they
exercise investment discretion, and not all such services or products may be
used by the Sub-Adviser in managing the Fund; provided that with respect to such
transaction and such determination the affiliates of the Sub-Adviser shall have
the same responsibilities to the Fund as the Sub-Adviser has under this
Agreement.
4. Information Provided to the Trust
The Sub-Adviser will keep the Trust and the Manager informed
of developments materially affecting the Fund of which the Sub-Adviser becomes
aware and will, on its own initiative, furnish the Trust and the Manager on at
least a quarterly basis with whatever information the Sub-Adviser believes is
appropriate for this purpose.
5. Standard of Care
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The Sub-Adviser shall exercise its best judgment in rendering
the services described in paragraphs 2 and 3 above. Except as may otherwise be
provided by federal or state securities laws, the Sub-Adviser shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Fund 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 (the conduct excepted in this
sentence shall be referred to as "Disqualifying Conduct").
6. Compensation
In consideration of the services rendered pursuant to this
Agreement, the Manager will pay the Sub-Adviser on the first business day of
each month a fee for the previous month at the annual rate of .55% of the Fund's
average daily net assets up to $25 million and .50% of the Fund's average daily
net assets in excess of $25 million. The fee for the first month shall be
prorated based upon the number of days the account was open in that month. Upon
any termination of this Agreement before the end of a month, the fee for such
part of that month shall be prorated according to the proportion that such
period bears to the full monthly period and shall be payable upon the date of
termination of this Agreement. For the purpose of determining fees payable to
the Sub-Adviser, the value of the Fund's net assets shall be computed at the
times and in the manner specified in the Registration Statement.
7. Expenses
The Sub-Adviser will bear all of its expenses in performing
its services under this Agreement, which expenses shall not include brokerage
fees or commissions in connection with the effectuation of securities
transactions. The Sub- Adviser shall bear no expenses of the Trust, the Fund or
the Manager. The Trust bears the expenses described in its Registration
Statement. Any reimbursement of advisory fees required by the Management
Contract between the Trust and the Manager or any voluntary or statutory expense
limitation provision shall be the sole responsibility of the Manager.
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8. Services to Other Companies or Accounts
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 a manner reasonably equitable to each entity. Similarly,
opportunities to sell securities will be allocated in such an equitable manner.
The Trust recognizes that in some cases this procedure may limit 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 in 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 business or to render services
of whatever kind or nature. The Trust recognizes and agrees that the Sub-Adviser
may provide advice to other clients which may differ from or be identical to
advice given with respect to the Fund.
9. Term of Agreement
This Agreement shall become effective upon its execution,
shall continue for a one year term and shall continue thereafter so long as such
continuance is specifically approved at least annually by (i) the Board of
Trustees of the Trust or (ii) a vote of a "majority" (as defined in the 0000
Xxx) of the Fund's outstanding voting securities, provided that in either event
the continuance is also approved by a majority of the Board of Trustees who are
not "interested persons" (as defined in the 0000 Xxx) of any party to this
Agreement, by vote cast in person at a meeting called for the purpose of voting
on such approval. This Agreement is terminable, without penalty, on 60 days'
written notice by the Manager, the Board of Trustees of the Trust or by vote of
holders of a majority of the Fund's shares, or upon 60 days' written notice, by
the Sub-Adviser and, will terminate
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automatically upon any termination of the Management Contract. In addition, this
Agreement will also terminate automatically in the event of its assignment (as
defined in the 1940 Act). The Sub-Adviser agrees to notify the Trust of any
circumstances that to its best knowledge and belief might result in this
Agreement being deemed to be assigned.
10. Representations of the Trust and the Sub-Adviser
The Trust represents that (i) a copy of its Declaration and
Agreement of Trust, dated January 27, 1993, together with all amendments
thereto, is on file in the office of the Secretary of the Commonwealth of
Massachusetts, (ii) the appointment of the Sub-Adviser has been duly authorized,
and (iii) it has acted and will continue to act in conformity with the 1940 Act
and other applicable laws.
The Manager represents that (i) it is authorized to perform
the services herein, (ii) the appointment of the Sub- Adviser has been duly
authorized, and (iii) it will act in conformity with the 1940 Act and other
applicable laws.
The Sub-Adviser represents that it is authorized to perform
the services described herein.
11. Indemnification
The Manager shall indemnify and hold harmless the Sub- Advisor
from and against any and all claims, losses, liabilities or damages (including
reasonable attorneys' fees and other related expenses), howsoever arising from
or in connection with this Agreement or the performance by the Sub-Advisor of
its duties hereunder; provided, however, that nothing contained herein shall
require that the Sub-Advisor be indemnified for Disqualifying Conduct.
12. Amendment of this Agreement
No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought. No amendment
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of this Agreement shall be effective with respect to the Fund until approved by
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 of the Trust who are not interested
persons of the Trust or of the Manager or of the Sub-Adviser.
13. Limitation of Liability
This Agreement has been executed on behalf of the Trust by the
undersigned officer of the Trust in his capacity as an officer of the Trust. The
obligations of this Agreement shall be binding upon the assets and property of
the Fund only and not upon the assets and property of any other investment fund
of the Trust and shall not be binding upon any Trustee, officer or shareholder
of the Fund and/or the Trust individually.
14. Entire Agreement
This Agreement constitutes the entire agreement between the
parties hereto.
15. Governing Law
This Agreement shall be governed in accordance with the laws
of the Commonwealth of Massachusetts.
16. Miscellaneous
(a) Unless the Trust gives the Sub-Adviser written
instructions to the contrary, the Sub-Adviser shall vote all proxies solicited
by or with respect to the issuers of securities in which assets of the Fund may
be invested. The Sub-Adviser shall use its best good faith judgment to vote such
proxies in a manner which best serves the interests of the Fund's shareholders.
(b) The Trust shall provide the Sub-Adviser with a
copy of the Fund's agreement (the "Custody Agreement") with the Custodian
(the "Custodian") designated to hold the assets of the Fund and any
modification thereto in advance. The Fund's assets
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shall be maintained in the custody of the Custodian identified in, and in
accordance with the terms and conditions of, the Custody Agreement. The
Sub-Adviser shall have no liability for the acts or omissions of the Custodian.
Any assets added to the Fund shall be delivered directly to the Custodian.
(c) The Trust, the Fund and the Manager agree and acknowledge
that the Sub-Adviser is the sole owner of the name and xxxx "Xxxxx" and that all
use of any designation comprised in whole or part of Janus (a "Xxxxx Xxxx")
under this Agreement shall inure to the benefit of the Sub-Adviser. The use by
the Trust on its own behalf or on behalf of the Fund of any Xxxxx Xxxx in any
advertisement or sales literature or other materials promoting the Fund shall be
with the consent of the Sub-Adviser. The Trust and the Manager shall not,
without the consent of the Sub-Adviser, make representations regarding the
Sub-Adviser intended to be disseminated to the investing public in any
disclosure document, advertisement or sales literature or other materials
promoting the Fund. Such consent shall not be required for any documents or
other materials intended for broker-dealer use only, for use by the Trust's
trustees and for internal use by the Trust and the Manager. Consent by the
Sub-Adviser to such use of any Xxxxx Xxxx and any such representation shall not
be unreasonably withheld and shall be deemed to be given if no written objection
is received by the Trust, the Fund or the Manager within 3 business days after
the request is made by the Trust, the Fund or the Manager for such use of any
Xxxxx Xxxx or any such representation. Upon termination of this Agreement for
any reason, the Trust and the Manager shall cease all use of any Xxxxx Xxxx(s)
as soon as reasonably practicable.
(d) The Sub-Adviser agrees and acknowledges that the Trust is
the sole owner of the name and xxxx "The Sierra Variable Trust" and the Manager
is the sole owner of the name and xxxx "Sierra Investment Advisors" and that any
and all use of any designation comprised in whole or in part of "The Sierra
Variable Trust" or "Sierra Investment Advisors" (a "Xxxxxx Xxxx") under this
Agreement shall inure to the benefit of the Trust or the Manager, respectively.
The use by the Sub-Adviser on its own behalf of any Xxxxxx Xxxx in any
advertisement or sales literature or other materials promoting the Sub-Adviser
shall be with the consent of the Trust or the Manager, respectively. The
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Sub-Adviser shall not, without the consent of the Trust or the Manager, as
applicable, make representations regarding the Trust, the Fund or the Manager in
any disclosure document, advertisement or sales literature or other materials
promoting the Sub-Adviser. Consent by the Trust and the Manager to such use of
any Xxxxxx Xxxx and any such representations shall not be unreasonably withheld
and shall be deemed to be given if no written objection is received by the
Sub-Adviser within 5 business days after the request by the Sub-Adviser is made
for such use of any Xxxxxx Xxxx or any such representations. Upon termination of
this Agreement for any reason, the Sub-Adviser shall cease any and all use of
any Xxxxxx Xxxx as soon as reasonably practicable.
(e) The Sub-Adviser may perform its services through any
employee, officer or agent of the Sub-Adviser, and the Trust and the Fund shall
not be entitled to the advice, recommendation, or judgment of any specific
person.
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IN WITNESS WHEREOF the parties hereto have caused this
Agreement to be duly executed as of the date first written above.
ATTEST: SIERRA INVESTMENT ADVISORS
CORPORATION
\s\ Xxx X. Xxxxxx By: \s\ Xxxxxxx X. Goth
------------------------------- -------------------------------
Name: Xxx X. Xxxxxx Name: Xxxxxxx X. Goth
Title: Administrative Assistant Title: Chief Operating Officer
ATTEST: JANUS CAPITAL CORPORATION
By: \s\ Xxxxxxx X. Xxxxxxxxx
------------------------------- -------------------------------
Name: Name: Xxxxxxx X. Xxxxxxxxx
Title: Title: Assistant Vice President
Accepted and agreed to
as of the day and year
first above written:
THE SIERRA VARIABLE TRUST
By: \s\ Xxxxx Xxxxx
-----------------------------
Name: Xxxxx Xxxxx
Title: Director, Executive Vice President
& Secretary
ATTEST:
By: \s\ Xxxxxxx Xxxxxxxxx
-----------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Administrative Assistant
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