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Exhibit 5(a)-9.1
INVESTMENT ADVISORY AGREEMENT
Emerging Growth Fund
October 22, 1993
Sierra Investment Advisors Corporation
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P.O. Box 1160
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Dear Sirs:
Sierra Trust Funds (the "Company"), an unincorporated business trust
organized under the laws of the Commonwealth of Massachusetts, hereby agrees
with Sierra Investment Advisors Corporation ("Sierra Advisors"), a corporation
organized under the laws of the state of California, as follows:
1. Investment Description; Appointment
The Company desires to employ the capital of the Company's Emerging
Growth Fund (the "Fund") by investing and reinvesting in investments of the kind
and in accordance with the limitations specified in its Master Trust Agreement,
as amended, and in its Prospectus and Statement of Additional Information
relating to the Fund as from time to time in effect, and in such manner and to
such extent as may from time to time be approved by the Board of Trustees of the
Company. Copies of the Fund's Prospectus and Statement of Additional Information
and the Company's Master Trust Agreement, as amended, have been or will be
submitted to Sierra Advisors. The Company agrees to provide copies of all
amendments to the Fund's Prospectus and Statement of Additional Information and
the Company's Master Trust Agreement to Sierra Advisors on an on-going basis.
The Company desires to employ and hereby appoints Sierra Advisors to act as
investment advisor to the Fund. Sierra Advisors accepts the appointment and
agrees to furnish the services described herein for the compensation set forth
below.
2. Services as Investment Advisor
Subject to the supervision and direction of the Board of Trustees of
the Company, Sierra Advisors has general oversight responsibility for the
investment advisory services provided to the Fund and will exercise this
responsibility in accordance with the Company's Master Trust Agreement, the
Investment Company Act of 1940, and the Investment Advisers Act of 1940, as the
same may from time to time be amended, and with the Fund's investment
objective(s) and policies as stated in the Fund's Prospectus and Statement of
Additional Information relating to the Fund as from
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time to time in effect. In connection therewith, Sierra Advisors will, among
other things, (a) participate in the formulation of the Fund's investment
policies, (b) analyze economic trends affecting the Fund, (c) monitor the
expenses incurred by the Fund, (d) monitor the brokerage and research services
(as those terms are defined in Section 28(e) of the Securities Act of 1934, as
amended) that are provided to the Fund and may be considered by the Fund's
investment sub-advisor in selecting brokers or dealers to execute particular
transactions and (e) monitor and evaluate the services provided by the Fund's
investment sub-advisor under its investment sub-advisory agreement, including,
without limitation, the sub-advisor's adherence to the Fund's investment
objective(s) and policies and the Fund's investment performance.
3. Information Provided to the Company
Sierra Advisors will keep the Company informed of developments
materially affecting the Fund, and will, on its own initiative, furnish the
Company from time to time with whatever information Sierra Advisors believes is
appropriate for this purpose.
4. Standard of Care
Sierra Advisors shall exercise its best judgment in rendering the
services described in paragraph 2 above. Sierra Advisors 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 Investment
Company Act of 1940, as amended) 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 (each such breach, act or omission described in (a) or (b) shall be
referred to as "Disqualifying Conduct").
5. Compensation
In consideration of the services rendered pursuant to this Agreement,
the Company will pay Sierra Advisors on the first business day of each month a
fee for the previous month at the annual rate of .90% of the Fund's average
daily net assets up to $100 million, .85% of the Fund's average daily net assets
between $100 million and $500 million, and .75% of the Fund's average daily net
assets in excess of $500 million, out of which fee Sierra Advisors shall pay to
the sub-investment advisor of the Fund (the "Sub-Advisor") the fee required
under the Investment Sub-Advisory Agreement relating to the Fund among the
Company, Sierra Advisors and the Sub-Advisor. Upon any termination of this
Agreement before the end of a month, the fee for such part of that month shall
be
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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 Sierra Advisors, the value of the
Fund's net assets shall be computed at the times and in the manner specified in
the Fund's Prospectus or Statement of Additional Information relating to the
Fund as from time to time in effect.
6. Expenses
Sierra Advisors will bear all expenses in connection with the
performance of its services under this Agreement, including, without limitation,
payment of the sub-advisory fee to the Sub-Advisor. The Company will bear
certain other expenses to be incurred in its operation, including but not
limited to: organizational expenses; taxes, interest, brokerage fees and
commissions, if any; fees of trustees of the Company who are not officers,
directors, or employees of Sierra Advisors, the Company's sub-investment
advisors, the Fund's sub-administrator or any of their affiliates; Securities
and Exchange Commission fees and state Blue Sky qualification fees;
out-of-pocket expenses of custodians, transfer and dividend disbursing agents
and the Company's sub-administrator and transaction charges of custodians;
insurance premiums; outside auditing and legal expenses; costs of maintenance of
the Company'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 Company and of the officers or
Board of Trustees of the Company; and any extraordinary expenses. In addition,
the Fund pays a distribution fee pursuant to the terms of a Distribution Plan
adopted under Rule 12b-1 of the Investment Company Act of 1940, as amended.
7. Reimbursement to the Company
If in any fiscal year of the Fund the aggregate expenses of the Fund
(including fees pursuant to this Agreement, the sub-advisory agreement with the
Sub-Advisor and the Fund's administration and sub-administration agreements, but
excluding interest, taxes, brokerage, distribution fees relating to the Fund
paid pursuant to the Company's Distribution Plan and, if permitted by the
relevant state securities commissions, extraordinary expenses) exceed the
expense limitations of any state having jurisdiction over the Fund, Sierra
Advisors will reimburse the Fund for the excess expense to the extent required
by state law. A fee reduction pursuant to this paragraph 7, if any, will be
estimated and reconciled monthly. Sierra Advisors shall not be required to
reimburse any amount in excess of the advisory fee paid to it pursuant to this
Agreement.
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8. Services to Other Companies or Accounts
The Company understands that Sierra Advisors now acts as investment
adviser to the other investment funds of the Company, 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 Company has no objection to Sierra Advisors so acting. The
Company understands that the persons employed by Sierra Advisors to assist in
the performance of Sierra Advisors' 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 Sierra Advisors or any affiliate of Sierra Advisors to
engage in and devote time and attention to other businesses or to render
services of whatever kind or nature.
9. Term of Agreement
This Agreement shall become effective as of October 22, 1993, and shall
continue for an initial two-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 Company or (ii) a vote of a "majority" (as defined in the
Investment Company Act of 1940, as amended) 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 said Act) 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 Board of Trustees of the
Company or by vote of holders of a majority of the Fund's shares, or upon 90
days' written notice, by Sierra Advisors. This Agreement will also terminate
automatically in the event of its assignment (as defined in said Act). Sierra
Advisors agrees to notify the Company of any circumstances that might result in
this Agreement being deemed to be assigned.
10. Representations of the Company and Sierra Advisors
The Company represents that (i) a copy of its Master Trust Agreement,
dated February 22, 1989, together with all amendments thereto, is on file in the
office of the Secretary of the Commonwealth of Massachusetts, (ii) the
appointment of Sierra Advisors has been duly authorized and (iii) it has acted
and will continue to act in conformity with the requirements of the Investment
Company Act of 1940, as amended, and other applicable laws.
Sierra Advisors represents that it is authorized to perform the
services described herein.
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11. Indemnification
The Company shall indemnify and hold harmless Sierra Advisors from and
against any and all claims, losses, liabilities or damages (including reasonable
attorneys fees other related expenses), howsoever arising from or in connection
with this Agreement or the performance by Sierra Advisors of its duties
hereunder; provided, however, that nothing contained herein shall require that
Sierra Advisors be indemnified for Disqualifying Conduct.
12. Limitation of Liability
This Agreement has been executed on behalf of the Company by the
undersigned officer of the Company in his capacity as an officer of the Company.
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 Company and shall not be binding upon any Trustee, officer or
shareholder of the Fund and/or the Company individually.
13. Entire Agreement
This Agreement constitutes the entire agreement between the parties
hereto.
14. Governing Law
This Agreement shall be governed in accordance with laws of the
Commonwealth 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,
SIERRA TRUST FUNDS
By: \s\ ▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Executive Vice President,
Treasurer & Secretary
Accepted:
SIERRA INVESTMENT ADVISORS CORPORATION
By: \s\ ▇▇▇▇▇▇▇ ▇. GOTH
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Name: ▇▇▇▇▇▇▇ ▇. Goth
Title: Chief Operating Officer
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