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EXHIBIT 9(a)-3
FORM OF
ADMINISTRATION AGREEMENT
May 1, 1997
Sierra Fund Administration Corporation
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Ladies and Gentlemen:
The Sierra Variable Trust (the "Trust"), a business trust
organized under the laws of the Commonwealth of Massachusetts, confirms its
agreements with Sierra Fund Administration Corporation ("Sierra
Administration"), a corporation organized under the laws of the state of
California, regarding administration services to be provided by Sierra
Administration in connection with each of the investment funds offered from time
to time by the Trust (individually, a "Fund" and together, the "Funds"). Sierra
Administration agrees to provide services upon the following terms and
conditions:
1. Investment Description; Appointment
The Trust desires to employ the Trust's capital by investing and
reinvesting (a) in investments of the kind and in accordance with the
limitations specified in (i) the Trust's Agreement and Declaration of Trust
dated January 27, 1993, as amended from time to time (the "Declaration of
Trust"), and (ii) the prospectus (the "Prospectus") and statement of additional
information (the "Statement") relating to the Trust contained in the Trust's
Registration statement on Form N-1A, File No. 33-57732, filed with the
Securities and Exchange Commission (the "Registration Statement") and (b) in
such manner and to such extent as may from time to time be approved by the
Trust's Board of Trustees. Copies of the Prospectus, the Statement and the
Declaration of Trust have been submitted to Sierra Administration. The Trust
desires to employ and hereby appoints Sierra Administration to act as the
Trust's administrator. Sierra Administration accepts this appointment and agrees
to furnish the services described herein for the compensation set forth below.
2. Services as Administrator
Subject to the supervision and direction of the Board of Trustees
of the Trust, Sierra Administration is responsible for all administrative
functions with respect to the Trust and will (a) assist in supervising all
aspects of the operations of the Trust except those performed by the Trust's
investment adviser and/or sub-advisers under their respective investment
management, investment advisory and sub-advisory agreements; (b) supply the
Trust with office facilities
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(which may be in Sierra Administration's own offices), statistical and research
data, data processing services, clerical, accounting and bookkeeping services
(including, but not limited to, the calculation of the net asset values of
shares of the Trust, internal auditing and legal services, internal executive
and administrative services, and stationery and office supplies; (c) prepare
reports to the Trust's shareholders and materials for the Board of Trustees of
the Trust; (d) prepare tax returns and reports to and filings with the
Securities and Exchange Commission and state Blue Sky authorities; (e) cooperate
with the Trust's transfer agent for the purpose of establishing and implementing
procedures to ensure that the Trust's transfer agency and shareholder relations
functions are efficiently carried out; and (f) provide such other similar
services as the Trust may reasonably request to the extent permitted under
application statutes, rules and regulations. The services to be performed by
Sierra Administration hereunder may be delegated by it, in whole or in part, to
one or more sub-administrators provided that any delegation of duties to a
sub-administrator shall not relieve Sierra Administration of its
responsibilities hereunder. Notwithstanding anything to the contrary in this
Agreement, Sierra Administration shall not be responsible for the performance of
any duties which are required to be performed by the Trust's transfer agent.
3. Compensation
(a) In consideration of services rendered pursuant to this
Agreement, the Trust will pay Sierra Administration on the first business day of
each month a fee for the previous month at an annual rate based on each Fund's
average daily net assets, as set forth in Schedule A attached hereto. Sierra
Administration shall pay expenses as described in Paragraph 4 including, without
limitation, fees to any sub-administrator and the custodian. The fee for the
period from the date the Trust commences operations to the end of that month
shall be prorated according to the proportion such period bears to the full
monthly period.
(b) Upon any termination of this Agreement before the end of any
month, the fee such part of a month shall be prorated according to the
proportion which 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 Sierra Administration, the value of each Fund's net
assets shall be computed at the times and in the manner specified in the
Prospectus and/or the Statement relating to the Fund as from time to time in
effect.
4. Expenses
Sierra Administration will bear all expenses in connection with
the performance of its services under this Agreement, including, without
limitation, payment of the fee to the custodian, and any sub-administrator
described in Paragraph 3 above. The Trust will bear certain other expenses to be
incurred in its operation, including: organizational expenses; taxes, interest,
brokerage fees and commissions, if any; fees of trustees of the Trust who are
not officers, director, or employees of Sierra Investment Advisors Corporation
and Sierra Investment Services Corporation, any sub-adviser or
sub-administrator, or any of their affiliates; transfer agent fees;
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Securities and Exchange Commission fees and state Blue Sky qualification fees;
out-of-pocket expenses of custodians, transfer and dividend disbursing agents
and the Trust's sub-administrator and transaction charges of custodians;
insurance premiums; outside auditing and legal expenses; costs of maintenance of
the Trust's existence; costs attributable to investor services, including,
without limitation, telephone and personnel expenses; costs of preparing and
printing prospectuses and statements of additional information for regulatory
purposes and for distribution to existing shareholders; costs of shareholders'
reports and meetings of the shareholders of the Trust and of the officers or
Board of Trustees of the Trust; and any extraordinary expenses.
5. Standard of Care
Sierra Administration shall exercise its best judgment in
rendering the services listed in Paragraph 2 above. Sierra Administration 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) a loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services (in which case any award of
damages shall be limited to the period and the amount set forth in Section
36(b)(3) of the 1940 Act), or (b) 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.
6. Term of Agreement
This Agreement shall become effective as of the date the Trust
commences its investment operations and shall continue for an initial two-year
term and shall continue automatically from year-to-year thereafter unless
terminated in accordance with the following sentence. This Agreement is
terminable at any time, without penalty, on 60 days' written notice, by the
Board of Trustees of the Trust or upon 90 days' written notice, by Sierra
Administration.
7. Service to Other Companies or Accounts
The Trust understands that Sierra Administration may act in the
future as administrator to other investment companies or series of investment
companies, and the Trust has no objection to Sierra Administration's so acting
in such capacity. The Trust understands that the persons employed by Sierra
Administration to assist in the performance of Sierra Administration's duties
under this Agreement will not devote their full time to such service and nothing
contained in this Agreement shall be deemed to limit or restrict the right of
Sierra Administration affiliate or any affiliate of Sierra Administration to
engage in and devote time and attention to other businesses or to render
services of whatever kind or nature.
8. Representations of the Trust and Sierra Administration
The Trust represents that (i) a copy of the Declaration of Trust
is on file in the office of the Secretary of the Commonwealth of Massachusetts,
(ii) the appointment of Sierra
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Administration has been duly authorized and (iii) it has acted and will continue
to act in conformity with the 1940 Act and other applicable laws. Sierra
Administration represents that it is authorized to perform the services
described herein.
9. Limitation of Liability
The copy of the Declaration of 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, officers or shareholders individually but are binding
only upon the assets and property of the Trust.
10. Entire Agreement
This Agreement constitutes the entire agreement between the
parties hereto.
11. Governing Law
This Agreement shall be governed in accordance with the laws of
the State of Massachusetts.
If the foregoing accurately sets forth our agreement, kindly
indicate your acceptance hereof by signing and returning the enclosed copy
hereof.
Very truly yours,
THE SIERRA VARIABLE TRUST
By __________________________
Name: F. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman and President
Accepted:
SIERRA FUND ADMINISTRATION
CORPORATION
By ______________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer, Treasurer
and Secretary
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Schedule A
ADMINISTRATION AGREEMENT
Dated May 1, 1997
FUND AND FEE SCHEDULE
(Pursuant to Section 3)
The following Funds (as defined in the Administration Agreement
attached hereto) are governed by such Agreement and the Trust will pay Sierra
Administration (as such parties are defined in the Agreement) fees at the annual
rate set forth opposite the name of such Fund below:
Fund Annual Rate
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Capital Growth Portfolio 0.15%
Growth Portfolio 0.15%
Balanced Portfolio 0.15%
Value Portfolio 0.15%
Income Portfolio 0.15%
Global Money Fund 0.18%
Growth Fund 0.18%
International Growth Fund 0.18%
U.S. Government Fund 0.18%
Corporate Income Fund 0.18%
Short Term Global Government Fund 0.18%
Emerging Growth Fund 0.18%
Growth and Income Fund 0.18%
Short Term High Quality Bond Fund 0.18%
Schedule Adopted as of May 1, 1997
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