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Exhibit 5(b)-12.1
AMENDED AND RESTATED INVESTMENT SUB-ADVISORY AGREEMENT
This Agreement is made and entered into as of this 22nd day of November
1993, by and among Sierra Trust Funds (the "Company"), an unincorporated
business trust organized under the laws of the Commonwealth of Massachusetts,
Sierra Investment Advisors Corporation ("Sierra Advisors"), a corporation
organized under the laws of the state of California and Janus Capital
Corporation (the "Sub-Advisor"), a corporation organized under the laws of the
state of Colorado.
WITNESSETH:
Whereas, the Company 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 "Investment Company Act");
Whereas, the Company offers a number of investment portfolios, each
with its own investment objective and strategies, and of which one investment
portfolio is the Growth Fund (the "Fund");
Whereas, Sierra Advisors 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 advisor of the Company;
Whereas, the Sub-Advisor is engaged in the business of rendering
investment advisory and management services and is registered as an investment
adviser under the Advisers Act; and
Whereas, the Company and Sierra Advisors desire to retain the
Sub-Advisor to furnish investment advisory and management services to the
Company and to the Fund and the Sub-Advisor is willing to furnish such
services;
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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 Company desires to employ the capital of the Company's 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 in effect and which may be amended from time to time, 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, as amended, have been or will be submitted to the
Sub-Advisor. The Company agrees to provide copies of all amendments or
supplements to the Fund's Prospectus and Statement of Additional Information and
the Company's Master Trust Agreement to the Sub-Advisor during the continuance
of this Agreement before or at the time such amendments or supplements become
effective.
The Company agrees to furnish the Sub-Advisor with minutes of meetings
of the Board of Trustees of the Fund to the extent they may affect the duties of
the Sub-Advisor, a certified copy of any financial statements or reports
prepared for the Fund, by certified or independent public accountants, and with
copies of any financial statements or reports made by the Fund to its
shareholders or to any governmental body or securities exchange, and any further
materials or information which the Sub-Advisor may reasonably request to enable
it to perform its functions under this Agreement. The Company desires to employ
and hereby appoints the Sub-Advisor to act as investment sub-adviser to the
Fund. The Sub-Advisor accepts the appointment and agrees to furnish the services
described herein for the compensation set forth below.
2. Services as Investment Sub-Advisor
Subject to the supervision of the Board of Trustees of the Company and
of Sierra Advisors, the Fund's investment adviser, the Sub-Advisor will (a)
maintain compliance procedures for the Fund that the Sub-Advisor believes are
adequate to ensure its compliance with the applicable provisions of the
Investment Company 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 Prospectus
and Statement of Additional Information as in effect and, after notice to the
Sub-Advisor, and which may be amended from time to time, (c) place purchase
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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 Investment Company Act and the Advisers Act
and the rules adopted thereunder and will furnish Sierra Advisors quarterly,
annual and special reports as Sierra Advisors may reasonably request; and (e)
treat confidentially and as proprietary information of the Company, all records
and other information relative to the Company 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 Company, which
approval shall not be unreasonably withheld and such records may not be withheld
where the Sub-Advisor 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 Company. In providing those
services, the Sub-Advisor 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 Sierra Advisors and in accordance with
the investment objective and policies as stated in the Fund's Prospectus and
Statement of Additional Information, the Sub-Advisor is authorized, in its
discretion and without prior consultation with Sierra Advisors to buy, sell,
lend, and otherwise trade in any 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-Advisor
shall determine. In addition, the Sub-Advisor will furnish the Fund or Sierra
Advisors with whatever statistical information the Fund or Sierra Advisors 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 Company, which may be conducted as often as quarterly, the Sub-Advisor shall
place all orders for the purchase and sale of securities for the Fund with
brokers or dealers selected by the Sub-Advisor, which may include brokers or
dealers affiliated with the Sub-Advisor. All transactions with any affiliated
person of the Company, or where
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any such affiliated person acts as broker or agent in connection with any such
transaction, shall be accomplished in compliance with the Investment Company
Act, the Advisers Act, the Securities Exchange Act of 1934, as amended, the
rules adopted thereunder and the procedures adopted thereunder by the Company.
Purchase or sell orders for the Fund may be aggregated with contemporaneous
purchase or sell orders of other clients of the Sub-Advisor; provided that (i)
no advisory account will be favored by the Sub-Advisor 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 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-Advisor's books and records
so as to identify the particular client who has the beneficial interest therein.
The Sub-Advisor 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-Advisor 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-Advisor. The Sub-Advisor 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-Advisor 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-Advisor 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-Advisor
in managing the Fund; provided that with respect to such transaction and such
determination the affiliates of the Sub-Advisor shall have the same
responsibilities to the Fund as the Sub-Advisor has under this Agreement.
4. Information Provided to the Company
The Sub-Advisor will keep the Company and Sierra Advisors informed of
developments materially affecting the Fund of which the Sub-Advisor becomes
aware and will, on its own initiative, furnish the Company and Sierra Advisors
on at least a quarterly basis with whatever information the Sub-Advisor believes
is appropriate for this purpose.
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5. Standard of Care
The Sub-Advisor shall exercise its best judgment in rendering the
services described in paragraphs 2 and 3 above. Except as may otherwise be
provided by federal securities laws, the Sub-Advisor 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,
Sierra Advisors will pay the Sub-Advisor 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 including cash and cash equivalents up to $100 million and .50%
of the Fund's average daily net assets in excess of $100 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-Advisor, 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.
7. Expenses
The Sub-Advisor 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-Advisor shall bear no expenses of the Company, the Fund or Sierra
Advisors. 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 the Sub-Advisor, Sierra
Advisors, the Fund's sub-administrator or any of their affiliates; Securities
and Exchange Commission fees and state Blue Sky qualification fees; all fees,
including out-of-pocket expenses of custodians, transfer and dividend disbursing
agents
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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 Fund 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. Any reimbursement of
advisory fees required by any expense limitation provision shall be the sole
responsibility of Sierra Advisors.
8. Services to Other Companies or Accounts
The Company understands that the Sub-Advisor 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 Company has no objection to
the Sub-Advisor so acting, provided that whenever the Fund and one or more other
accounts or investment companies advised by the Sub-Advisor 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 Company 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
Company understands that the persons employed by the Sub-Advisor to assist in
the performance of the Sub-Advisor'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-Advisor or any affiliate of the Sub-Advisor to
engage in and devote time and attention to other business or to render services
of whatever kind or nature. The Company recognizes and agrees that the
Sub-Advisor 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 as of the date first written
above, 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 Company or (ii) a vote of a "majority" (as defined in the
Investment Company Act) of the Fund's outstanding voting
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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 Investment Company 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 30 days' written notice by Sierra
Advisors, the Board of Trustees of the Company or by vote of holders of a
majority of the Fund's shares, or upon 60 days' written notice, by the
Sub-Advisor and, will terminate automatically upon any termination of the
advisory agreement between the Company and Sierra Advisors. In addition, this
Agreement will also terminate automatically in the event of its assignment (as
defined in the Investment Company Act). The Sub-Advisor agrees to notify the
Company of any circumstances that to its best knowledge and belief might result
in this Agreement being deemed to be assigned.
10. Representations of the Company and the Sub-Advisor
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 the Sub-Advisor has been duly authorized, and (iii) it has acted
and will continue to act in conformity with the Investment Company Act and other
applicable laws.
Sierra Advisors represents that (i) it is authorized to perform the
services herein, (ii) the appointment of the Sub-Advisor has been duly
authorized, and (iii) it will act in conformity with the Investment Company Act
and other applicable laws.
The Sub-Advisor represents that it is authorized to perform the
services described herein.
11. Indemnification
Sierra Advisors 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.
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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 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.
13. 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.
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 Company gives the Sub-Advisor written instructions to
the contrary, the Sub-Advisor 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-Advisor 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 Company shall provide the Sub-Advisor 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 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-Advisor shall have no liability for
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the acts or omissions of the Custodian. Any assets added to the
Fund shall be delivered directly to the Custodian.
(c) The Company, the Fund and Sierra Advisors agree and acknowledge
that the Sub-Advisor is the sole owner of the name and ▇▇▇▇ "▇▇▇▇▇" and that all
use of any designation comprised in whole or part of Janus (a "▇▇▇▇▇ ▇▇▇▇")
under this Agreement shall inure to the benefit of the Sub-Advisor. The use by
the Company on its own behalf or on behalf of the Fund of any ▇▇▇▇▇ ▇▇▇▇ in any
advertisement or sales literature or other materials promoting the Fund shall be
with the consent of the Sub-Advisor. The Company and Sierra Advisors shall not,
without the consent of the Sub-Advisor, make representations regarding the
Sub-Advisor 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 Company's
trustees and for internal use by the Company and Sierra Advisors. Consent by the
Sub-Advisor to such use of any ▇▇▇▇▇ ▇▇▇▇ and any such representation shall not
be unreasonably withheld and shall be deemed to be given if no written objection
is received by the Company, the Fund or Sierra Advisors within 3 business days
after the request is made by the Company, the Fund or Sierra Advisors for such
use of any ▇▇▇▇▇ ▇▇▇▇ or any such representation. Upon termination of this
Agreement for any reason, the Company and Sierra Advisors shall cease all use of
any ▇▇▇▇▇ ▇▇▇▇(s) as soon as reasonably practicable.
(d) The Sub-Advisor agrees and acknowledges that the Company is the
sole owner of the name and ▇▇▇▇ "Sierra Trust Funds" and Sierra Advisors is the
sole owner of the name and ▇▇▇▇ "Sierra Investment Advisors" and that any and
all use of any designation comprised in whole or in part of "Sierra Trust Funds"
or "Sierra Investment Advisors" (a "▇▇▇▇▇▇ ▇▇▇▇") under this Agreement shall
inure to the benefit of the Company or Sierra Advisors, respectively. The use by
the Sub-Advisor on its own behalf of any ▇▇▇▇▇▇ ▇▇▇▇ in any advertisement or
sales literature or other materials promoting the Sub-Advisor shall be with the
consent of the Company or Sierra Advisors, respectively. The Sub-Advisor shall
not, without the consent of the Company or Sierra Advisors, as applicable, make
representations regarding the Company, the Fund or Sierra Advisors in any
disclosure document, advertisement or sales literature or other materials
promoting the Sub-Advisor. Consent by the Company and Sierra Advisors to such
use of any ▇▇▇▇▇▇ ▇▇▇▇ 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-Advisor within 5 business days after the request by the Sub-Advisor is
made for such use of any ▇▇▇▇▇▇ ▇▇▇▇ or any such representations. Upon
termination of this Agreement for any
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reason, the Sub-Advisor shall cease any and all use of any ▇▇▇▇▇▇
▇▇▇▇ as soon as reasonably practicable.
(e) The Sub-Advisor may perform its services through any employee,
officer or agent of the Sub-Advisor, and the Company and the Fund shall not be
entitled to the advice, recommendation, or judgment of any specific person.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
duly executed as of the date first written above.
ATTEST: SIERRA TRUST FUNDS
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Administrative Assistant Title: Executive Vice President
ATTEST: SIERRA INVESTMENT ADVISORS
CORPORATION
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. Goth
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Name: ▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. Goth
Title: Administrative Assistant Title: Chief Operating Officer
ATTEST: JANUS CAPITAL CORPORATION
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Legal Assistant Title: Asst. Vice President
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