TOUCHSTONE VARIABLE SERIES TRUST
RESTATED AND AMENDED
RESTATED AND AMENDED , DATED AS OF ____________________,
2002, by and between Touchstone Variable Series Trust, a Massachusetts business
trust (the "Trust"), and Touchstone Advisors, Inc., an Ohio corporation
("Touchstone").
W I T N E S S E T H:
WHEREAS, the Trust is engaged in business as an open-end investment company
registered under the Investment Company Act of 1940, as amended (collectively
with the rules and regulations promulgated thereunder as amended from time to
time, the "1940 Act");
WHEREAS, the Trust engaged Touchstone to act as the sponsor for, and to
provide certain management and supervisory services with respect to, all then
existing or future series (each a "Fund" and collectively the "Funds") of the
Trust, pursuant to a dated as of September 9, 1994, as
amended;
WHEREAS, the Trust and Touchstone entered into a Restated and Amended
dated as of May 1, 1999 (the "1999 Agreement") and
subsequently amended the 1999 Agreement; and
WHEREAS, the Trust and Touchstone wish to execute another Amended and
Restated that incorporates the terms of the 1999 Agreement and
the amendments to the 1999 Agreement, reflects the current waiver and
reimbursement obligations of Touchstone with respect to the High Yield Fund, and
incorporates other corrections to the terms of the agreement between the
parties.
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties hereto as set forth herein, the parties covenant and agree as
follows:
1. DUTIES OF TOUCHSTONE. Subject to the direction and control of the
Board of Trustees of the Trust (the "Board"), Touchstone shall perform such
sponsorship and management and supervisory services as may from time to time be
reasonably requested by the Trust, which shall include without limitation:
(a) providing office space, equipment and clerical personnel
necessary for performing the management functions set forth in this
Agreement;
(b) arranging, if desired by the Trust, for directors, officers or
employees of Touchstone to serve as Trustees, officers or agents of the
Trust if duly elected or appointed to such positions and subject to their
individual consent and to any limitations imposed by law;
(c) supervising the overall administration of the Trust, including
the provision of services to the Trust by the Trust's administrator, fund
accounting agent, transfer agent and custodian, which services include
without limitation:
i) the updating of corporate organizational documents, and the
negotiation of contracts and fees with, and the monitoring and
coordinating of performance and xxxxxxxx of, the Trust's transfer
agent, custodian, shareholder servicing agents and other independent
contractors or agents,
ii) the preparation of and filing of documents required for
compliance by the Trust with applicable laws and regulations
(including state "blue sky" laws and regulations), including
registration statements on Form N-1A (or any other applicable form),
prospectuses and statements of additional information and semi-annual
and annual reports to the Trust's shareholders,
iii) the review of tax returns (including coordinating the
preparation of tax returns but not the preparation of tax returns),
iv) the preparation of agendas and supporting documents for and
minutes of meetings of Trustees and of committees of Trustees, in each
case on behalf of the Funds, or any of them, and preparation of
notices, proxy statements and minutes of meetings of shareholders of
the Trust or of one or more of the Funds,
v) the maintenance of books and records of the Trust in
respect of the Funds,
vi) telephone coverage to respond to shareholder inquiries
regarding the Funds,
vii) the provision of monitoring reports and assistance
regarding each Fund's compliance with federal securities and tax laws
including compliance with the 1940 Act and Subchapter M of the
Internal Revenue Code of 1986, as amended,
viii) the dissemination of yield and other performance
information regarding the Funds to newspapers and tracking services,
ix) the preparation of annual renewals for fidelity bond and
errors and omissions insurance coverage,
x) the development of a budget for the Trust on behalf of the
Funds, the establishment of the rate of expense accruals and the
arrangement of the payment of all fixed and management expenses of the
Funds, and
xi) the determination of each Fund's net asset value and the
provision of all other fund accounting services to the Funds.
2. ORGANIZATION EXPENSES. Touchstone shall pay all of the organization
expenses of the Trust required to be paid prior to the Trust's or any Fund's
commencement of investment operations. The Trust shall reimburse Touchstone,
without any interest or carrying charges, for such organization expenses.
3. ALLOCATION OF CHARGES AND EXPENSES. Touchstone shall pay the entire
salary and wages of the trustees, officers and agents of the Trust who devote
part or all of their time to the
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affairs of Touchstone or its affiliates, and the salaries and wages of such
persons shall not be deemed to be expenses incurred by the Trust.
4. OPERATING EXPENSE WAIVERS OR REIMBURSEMENTS. Touchstone shall waive
all or a portion of its fee pursuant to this Agreement and/or reimburse a
portion of the operating expenses (including amortization of organization
expense, but excluding interest, taxes, brokerage commissions and other
portfolio transaction expenses, capital expenditures and extraordinary expenses)
("Expenses") of each Fund such that, after such waiver and/or reimbursement, the
aggregate Expenses of the Fund shall be equal on an annual basis to the
following percentage of the average daily net assets of the Fund for the Fund's
then-current fiscal year:
Touchstone International Equity Fund 1.25%
Touchstone Emerging Growth Fund 1.15%
Touchstone Small Cap Value Fund 1.00%
Touchstone Growth/Value Fund 1.10%
Touchstone Equity Fund 0.95%
Touchstone Enhanced 30 Fund 0.75%
Touchstone Value Plus Fund 1.15%
Touchstone Growth & Income Fund 0.85%
Touchstone Balanced Fund 0.90%
Touchstone High Yield Fund 0.80%
Touchstone Bond Fund 0.75%
Touchstone Standby Income Fund 0.50%
Touchstone Money Market Fund 0.60%
5. TERMINATION OF OPERATING EXPENSE WAIVERS OR REIMBURSEMENTS.
Touchstone's waiver obligations or its reimbursement obligations with respect to
a Fund may be terminated by Touchstone as of the end of any calendar quarter
after the applicable date listed below upon at least 30 days prior written
notice to the Fund (an "Expense Cap Termination"):
Touchstone International Equity Fund December 31, 2002
Touchstone Emerging Growth Fund December 31, 2002
Touchstone Small Cap Value Fund December 31, 2002
Touchstone Growth/Value Fund December 31, 2002
Touchstone Equity Fund December 31, 2002
Touchstone Enhanced 30 Fund December 31, 2002
Touchstone Value Plus Fund December 31, 2002
Touchstone Growth & Income Fund December 31, 2002
Touchstone Balanced Fund December 31, 2002
Touchstone High Yield Fund April 30, 2004
Touchstone Bond Fund December 31, 2002
Touchstone Standby Income Fund December 31, 2002
Touchstone Money Market Fund December 31, 2002
6. COMPENSATION OF TOUCHSTONE. For the services to be rendered, the
facilities to be provided and the expenses to be assumed by Touchstone under
this Agreement, the Trust shall
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pay to Touchstone a sponsor fee from the assets of each Fund equal on an annual
basis to 0.20% of the Fund's average daily net assets for the Fund's
then-current fiscal year.
If Touchstone serves under this Agreement for less than the whole of any
month, the compensation to Touchstone under this Agreement shall be prorated.
For purposes of computing the fees payable to Touchstone under this Agreement,
the net asset value of each Fund shall be computed in the manner specified in
the Trust's then-current registration statement.
7. WAIVER OF COMPENSATION. Touchstone hereby waives all of its fees under
this Agreement with respect to the High Yield Fund until June 28, 2003.
8. SUBCONTRACTING BY TOUCHSTONE. Touchstone may subcontract for the
performance of Touchstone's obligations under this Agreement with any one or
more persons; provided, however, that Touchstone shall be as fully responsible
to the Trust for the acts and omissions of any subcontractor as it would be for
its own acts or omissions.
9. LIMITATION OF LIABILITY OF TOUCHSTONE. Touchstone shall not be liable
for any error of judgment or mistake of law or for any act or omission in the
sponsorship of the Trust or the performance of its duties under this Agreement,
except for willful misfeasance, bad faith or gross negligence in the performance
of its duties, or by reason of the reckless disregard of its obligations and
duties under this Agreement. As used in this Section 9, the term "Touchstone"
shall include Touchstone and/or any of its affiliates and the directors,
officers and employees of Touchstone and/or any of its affiliates.
10. ACTIVITIES OF TOUCHSTONE. The services of Touchstone to the Trust are
not to be deemed exclusive, Touchstone being free to render similar sponsorship
and management and supervisory services and/or other services to other parties.
It is understood that the Trustees and officers of the Trust and shareholders of
a Fund are or may become interested in Touchstone and/or any of its affiliates,
as directors, officers, employees, or otherwise, and that directors, officers
and employees of Touchstone and/or any of its affiliates are or may become
similarly interested in the Trust and that Touchstone and/or any of its
affiliates may be or become interested in the Trust as a shareholder of a Fund
or otherwise.
11. DURATION AND TERMINATION. This Agreement shall become effective as of
the day and year first above written and shall govern the relations between the
parties to this Agreement until terminated in accordance with this Section 11.
This Agreement may be terminated with respect to any Fund by the Board, or by
the vote of a "majority of the outstanding voting securities" (as such phrase is
defined in the 0000 Xxx) of the Fund, as of the end of the calendar quarter
during which the Trust has given at least 30 days advance written notice to
Touchstone that it is terminating this Agreement as to the Fund. Subject to the
provisions of Section 5 above, this Agreement may be terminated with respect to
any Fund by Touchstone, either (a) at the end of any calendar quarter during
which Touchstone has given at least 30 days advance written notice to the Trust
that it is terminating this Agreement as to the Fund or (b) at such time as
Touchstone ceases to be the investment advisor to the Fund. In the event of a
termination pursuant to clause (a) of the preceding sentence, each party's
obligations under this Agreement shall terminate as to the Fund as of the end of
the calendar quarter in which the notice of termination is given; in the event
of a termination pursuant to clause (b) of the preceding sentence,
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Touchstone's obligations under this Agreement shall terminate as to the Fund as
of the effective date of its termination as investment advisor.
12. AMENDMENT. Except for an Expense Cap Termination, this Agreement may
not be amended except by an instrument in writing signed by both parties.
13. SEVERABILITY. If any provision of this Agreement shall become or shall
be found to be invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
14. NOTICE. Any notices under this Agreement shall be in writing addressed
and delivered personally, delivered by telecopy or mailed postage-paid to the
other party at such address as such other party may designate in accordance with
this Section 14 for the receipt of such notice. Until further notice to the
other party, it is agreed that the address of the Trust and Touchstone shall be
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxx 00000.
15. MISCELLANEOUS. Each party agrees to perform such further actions and
execute such further documents as are necessary to effectuate the purposes of
this Agreement. This Agreement shall be construed and enforced in accordance
with and governed by the laws of the State of Ohio. The captions in this
Agreement are included for convenience only and in no way define or delimit any
of the provisions of this Agreement or otherwise affect their construction or
effect. This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written. The
person signing on behalf of the Trust has executed this Agreement not
individually, but as an officer under the Trust's Declaration of Trust, and the
obligations of this Agreement are not binding upon such person or upon any of
the Trust's Trustees, officers or shareholders individually, but bind only the
Trust estate.
TOUCHSTONE ADVISORS, INC. TOUCHSTONE VARIABLE SERIES TRUST
By: By:
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Name: Name:
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Title: Title:
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