1
EXHIBIT 5(a)-8
INVESTMENT ADVISORY AGREEMENT
MAY 1, 1997
Sierra Investment Services Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
The Sierra Variable Trust (the "Trust"), an unincorporated
business trust organized under the laws of the Commonwealth of Massachusetts,
hereby agrees with Sierra Investment Services Corporation ("Sierra Services"), a
corporation organized under the laws of the state of California, as follows:
1. Investment Description; Appointment
The Trust desires to employ the capital of the Trust's managed
investment portfolios listed in the SCHEDULE(S) attached hereto and made a part
of this Agreement, (each, a "Portfolio," and together, the "Portfolios") by
investing and reinvesting in investments of the kind and in accordance with the
limitations specified in the Trust's Agreement and Declaration of Trust, as
amended (the "Trust Agreement"), and in its prospectus(es) and statement(s) of
additional information relating to the Portfolios as from time to time in effect
(the "Prospectus" and the "Statement of Additional Information", respectively),
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 Prospectus, Statement of
Additional Information and Trust Agreement have been or will be submitted to
Sierra Services. The Trust agrees to provide copies of all amendments to the
Prospectus, Statement of Additional Information and Trust Agreement to Sierra
Services on an ongoing basis. The Trust desires to employ and hereby appoints
Sierra Services to act as investment advisor to the Portfolios. Sierra Services
accepts the appointment and agrees to furnish the services described herein for
the compensation set forth below.
2
2. Services as Investment Advisor
Subject to the supervision and direction of the Board of Trustees
of the Trust, Sierra Services has responsibility for the investment advisory
services provided to the Portfolios and will exercise this responsibility in
accordance with the Trust Agreement, the Investment Company Act of 1940, as
amended (the "1940 Act"), and the Investment Advisers Act of 1940, as amended,
and with the Portfolios' investment objectives and policies as stated in the
Prospectus and Statement of Additional Information relating to the Portfolios as
from time to time in effect. In connection therewith, Sierra Services will,
among other things, (a) make investment decisions for the Portfolios in
accordance with the Portfolios' investment policies, (b) place purchase and sale
orders on behalf of the Portfolios to effectuate the investment decisions made,
(c) maintain books and records with respect to the securities transactions of
the Portfolios and will furnish the Trust's Board of Trustees such periodic,
regular and special reports as the Board may request.
3. Information Provided to the Trust
Sierra Services will keep the Trust informed of developments
materially affecting the Portfolios, and will, on its own initiative, furnish
the Trust from time to time with whatever information Sierra Services believes
is appropriate for this purpose.
4. Standard of Care
Sierra Services shall exercise its best judgment in rendering the
services described in paragraph 2 above. Sierra Services shall not be liable for
any error of judgment or mistake of law or for any loss suffered by the
Portfolios 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
▇▇▇▇ ▇▇▇) 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 Trust will pay Sierra Services on the first business day of each
month a fee for the previous month at the annual rate specified in the
SCHEDULE(S) which is attached hereto and made part of this Agreement. The fee
will be calculated based on each Portfolio's average daily net assets. Upon any
termination of this Agreement before the end of a month, the fee for such part
of that month shall be prorated
3
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 Services, the value of each
Portfolio's average daily net assets shall be computed at the times and in the
manner specified in the Prospectus or Statement of Additional Information
relating to the Portfolio as from time to time in effect.
6. Expenses
Sierra Services will bear all expenses in connection with the
performance of its services under this Agreement. The Trust 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 Trust who are not officers, directors, or employees
of Sierra Services, the Portfolios' sub-administrator or any of their
affiliates; Securities and Exchange Commission fees and state Blue Sky
notification fees; transfer agent fees; out-of-pocket expenses of custodians,
transfer and dividend disbursing agents and the Portfolios' 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.
7. Services to Other Companies or Accounts
The Trust understands that Sierra Services now acts as investment
advisor to other investment companies and each of the Portfolios, and may act
now or in the future as investment advisor to (i) other series of the Trust;
(ii) fiduciary and other managed accounts; and (iii) one or more other
investment companies or series of investment companies; and the Trust has no
objection to Sierra Services so acting. The Trust understands that the persons
employed by Sierra Services to assist in the performance of Sierra Services'
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
Services or any affiliate of Sierra Services to engage in and devote time and
attention to other businesses or to render services of whatever kind or nature.
8. Term of Agreement
This Agreement shall become effective as of the date first
written above and shall continue for an initial two-year term and shall continue
thereafter with respect to any of the Portfolios so long as such continuance is
specifically approved at least annually by (i) the Board of Trustees of
4
the Trust or (ii) a vote of a "majority" (as defined in the ▇▇▇▇ ▇▇▇) of the
outstanding voting securities of such Portfolio; 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 ▇▇▇▇ ▇▇▇) 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 with respect to any of the
Portfolios, without penalty, on 60 days' written notice, by the Board of
Trustees of the Trust or by vote of holders of a majority of the outstanding
voting securities of such Portfolio, or upon 90 days' written notice, by Sierra
Services. This Agreement will also terminate automatically in the event of its
assignment (as defined in the 1940 Act). Sierra Services agrees to notify the
Trust of any circumstances that might result in this Agreement being deemed to
be assigned.
9. Representations of the Trust and Sierra Services
The Trust represents that (i) a copy of the Trust Agreement,
dated January 29, 1993, together with all amendments thereto, is on file in the
office of the Secretary of the Commonwealth of Massachusetts, (ii) the
appointment of Sierra Services has been duly authorized and (iii) the Trust has
acted and will continue to act in conformity with the requirements of the 1940
Act and other applicable laws.
Sierra Services represents that it is authorized to perform the
services described herein.
10. 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 with respect to each Portfolio shall be binding
upon the assets and property of such Portfolio only and not upon the assets and
property of any other investment fund (i.e., series) of the Trust and shall not
be binding upon any Trustee, officer or shareholder of the Portfolios and/or the
Trust individually.
11. Entire Agreement
This Agreement constitutes the entire agreement between the
parties hereto.
12. Governing Law
This Agreement shall be governed in accordance with laws of the
Commonwealth of Massachusetts.
5
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 /s/ F. ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: F. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President and Chairman
Accepted:
SIERRA INVESTMENT SERVICES CORPORATION
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President and Secretary
6
INVESTMENT ADVISORY AGREEMENT
Dated May 1, 1997
PORTFOLIO AND FEE SCHEDULE
(Pursuant to Sections 1 and 5)
The following Portfolios (as defined in the Investment Advisory
Agreement attached hereto) are governed by such Agreement and the Trust will pay
Sierra Investment Services Corporation (as such parties are defined in such
Agreement) fees at the annual rate set forth opposite the name of such Portfolio
below:
Portfolio Annual Rate
--------- -----------
Capital Growth .10%
Growth .10%
Balanced .10%
Value .10%
Income .10%
Schedule Adopted as of May 1, 1997