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Exhibit 5(E)
PORTFOLIO ADVISORY AGREEMENT
SELECT ADVISORS PORTFOLIOS
GROWTH & INCOME PORTFOLIO
GROWTH & INCOME II PORTFOLIO
This PORTFOLIO ADVISORY AGREEMENT is made as of the 1st day of January,
1998, by and between TOUCHSTONE ADVISORS, INC., an Ohio corporation (the
"Advisor"), and Xxxxxxx Xxxxxx Investments, Inc. (the "Portfolio Advisor"), a
Delaware corporation.
WHEREAS, the Advisor has been organized to operate as an investment
advisor registered under the Investment Advisers Act of 1940, as amended (the
"Advisers Act"), and has been retained by Select Advisors Portfolios (the
"Trust"), a New York trust organized pursuant to a Declaration of Trust dated
February 7, 1994 and registered as an open-end management investment company
under the Investment Company Act of 1940 (the "1940 Act") to provide investment
advisory services to the Growth & Income Portfolio and the Growth and Income II
Portfolio (herein together the "Portfolio"); and
WHEREAS, the Portfolio Advisor also is an investment advisor registered
under the Advisers Act; and
WHEREAS, the Advisor desires to retain the Portfolio Advisor to furnish it
with portfolio management services in connection with the Advisor's investment
advisory activities on behalf of the Portfolio, and the Portfolio Advisor is
willing to furnish such services to the Advisor and the Portfolio;
NOW THEREFORE, in consideration of the terms and conditions hereinafter
set forth, it is agreed as follows:
1. EMPLOYMENT OF THE PORTFOLIO ADVISOR. In accordance with and subject to
the Investment Advisory Agreement between the Trust and the Advisor, attached
hereto as Exhibit A (the "Advisory Agreement"), the Advisor hereby appoints the
Portfolio Advisor to manage the investment and reinvestment of those assets of
the Portfolio allocated to it by the Advisor (the "Portfolio Assets"), subject
to the control and direction of the Advisor and the Trust's Board of Trustees,
for the period and on the terms hereinafter set forth. The Advisor hereby
represents that (i) it has authority under the Advisory Agreement to appoint
the Portfolio Advisor to act as an investment adviser to the Trust, (ii) this
Agreement is valid and binding upon the Advisor. The Portfolio Advisor hereby
accepts such employment and agrees during such period to render the services
and to perform the duties called for by this Agreement for the compensation
herein provided. The Portfolio Advisor shall at all times maintain its
registration as an investment advisor under the Advisers Act and shall
otherwise comply in all
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material respects with all applicable laws and regulations, both state and
federal. The Portfolio Advisor shall for all purposes herein be deemed an
independent contractor and shall, except as expressly provided or authorized
(whether herein or otherwise), have no authority to act for or represent the
Trust in any way or otherwise be deemed an agent of the Trust or the Portfolio.
2. DUTIES OF THE PORTFOLIO ADVISOR. The Portfolio Advisor will provide
the following services and undertake the following duties:
a. The Portfolio Advisor will manage the investment and reinvestment of
the Portfolio Assets, subject to and in accordance with the investment
objectives, policies and restrictions of the Portfolio and any directions which
the Advisor or the Trust's Board of Trustees may give from time to time with
respect to the Portfolio. In furtherance of the foregoing, the Portfolio Advisor
will make all determinations with respect to the investment of the Portfolio
Assets and the purchase and sale of portfolio securities and shall take such
steps as may be necessary or advisable to implement the same. The Portfolio
Advisor also will determine the manner in which voting rights, rights to consent
to corporate action and any other rights pertaining to the portfolio securities
will be exercised. The Portfolio Advisor will render regular reports to the
Trust's Board of Trustees, to the Advisor and to RogersCasey Consulting, Inc.
(or such other advisor or advisors as the Advisor shall engage to assist it in
the evaluation of the performance and activities of the Portfolio Advisor). Such
reports shall be made in such form and manner and with respect to such matters
regarding the Portfolio and the Portfolio Advisor as the Trust, the Advisor or
RogersCasey Consulting, Inc. shall from time to time reasonably request.
b. The Portfolio Advisor shall provide support to the Advisor with respect
to the marketing of the Portfolio in a manner comparable to the support provided
to comparable clients of the Portfolio Advisor, including but not limited to:
(i) permission to use the Portfolio Advisor's name as provided in Section 6,
(ii) permission to use the past performance and investment history of the
Portfolio Advisor as the same is applicable to the Portfolio provided counsel to
the Trust determine that the use of such information and the manner of
presentation of such information is legally permissible, (iii) access to the
individual(s) responsible for day-to-day management of the Portfolio for
marketing conferences, teleconferences and other activities involving the
promotion of the Portfolio, subject to the reasonable request of the Advisor,
(iv) permission to use biographical and historical data of the Portfolio Advisor
and individual manager(s), and (v) with respect to clients whose names are
provided to the Advisor by the Portfolio Advisor in writing prior to use,
permission to use the names of these clients, subject to any
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restrictions imposed by these clients on the use of such names or by the
Advisers Act and the rules adopted thereunder.
c. The Portfolio Advisor will, in the name of the Portfolio, place orders
for the execution of all portfolio transactions in accordance with the policies
with respect thereto set forth in the Trust's registration statements under the
1940 Act and the Securities Act of 1933, as such registration statements may be
in effect from time to time. In connection with the placement of orders for the
execution of portfolio transactions, the Portfolio Advisor will create and
maintain all necessary brokerage records of the Portfolio in accordance with all
applicable laws, rules and regulations, including but not limited to records
required by Section 31(a) of the 1940 Act. All records shall be the property of
the Trust and shall be available for inspection and use by the Securities and
Exchange Commission (the "SEC"), the Trust or any person retained by the Trust.
Where applicable, such records shall be maintained by the Advisor for the
periods and in the places required by Rule 31a-2 under the 1940 Act. When
placing orders with brokers and dealers, the Portfolio Advisor shall seek to
obtain the most favorable price and execution available for the Portfolio, and
in placing such orders the Portfolio Advisor may consider a number of factors,
including, without limitation, the overall direct net economic result to the
Portfolio (including commissions, which may not be the lowest available but
ordinarily should not be higher than the generally prevailing competitive
range), the financial strength and stability of the broker, the efficiency with
which the transaction will be effected, the ability to effect the transaction at
all where a large block is involved and the availability of the broker or dealer
to stand ready to execute possibly difficult transactions in the future. The
Portfolio Advisor is specifically authorized, to the extent authorized by law
(including, without limitation, Section 28(e) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")), to pay a broker or dealer who provides
research services to the Portfolio Advisor an amount of commission for effecting
a portfolio transaction in excess of the amount of commission another broker or
dealer would have charged for effecting such transaction, in recognition of such
additional research services rendered by the broker or dealer, but only if the
Portfolio Advisor determines in good faith that the excess commission is
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer viewed in terms of the particular transaction
or the Portfolio Advisor's overall responsibilities with respect to
discretionary accounts that it manages, and that the Portfolio derives or will
derive a reasonably significant benefit from such research services. The
Portfolio Advisor will present a written report to the Board of Trustees of the
Trust, at least quarterly and at such other times as reasonably requested by the
Board of Trustees, indicating total brokerage expenses, actual or imputed, as
well as the services obtained in
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consideration for such expenses, broken down by broker-dealer and containing
such information as the Board of Trustees reasonably shall request.
d. The Portfolio Advisor may execute standard account documentation,
agreements, contracts and other documents (collectively "Account Documents") as
the Portfolio Advisor may be requested by brokers, dealers, counterparties and
other persons in connection with the Portfolio Advisor's management of the
Portfolio Assets, provided that the Advisor and the Trust's Board of Trustees
first authorize the Portfolio Advisor to execute Account Documents. In such
respect, and only for this limited purpose, the Portfolio Advisor shall act as
the agent and/or attorney-in-fact of the Trust and/or the Advisor.
e. The Advisor recognizes that, subject to the provisions of Section 2c,
Xxxxxxx Investor Services, Inc. or its successor ("SIS"), an affiliate of the
Portfolio Advisor, may act as the regular broker for the portfolio so long as it
is lawful for it so to act and that SIS may be a major recipient of brokerage
commissions paid by the portfolio. SIS may effect securities transactions for
the portfolio only if (i) the commissions, fees or other remuneration received
or to be received by it are reasonable and fair compared to the commissions,
fees or other remuneration received by other brokers in connection with
comparable transactions involving similar securities being purchased or sold on
a securities exchange during a comparable period of time and (ii) the Trustees,
including a majority of those Trustees who are not interested persons, have
adopted procedures pursuant to Rule 17e-1 under the 1940 Act for determining the
permissible level of such commissions.
f. The Advisor understands that (i) when orders to purchase or sell the
same security on identical terms are placed by more than one of the funds and/or
other advisory accounts managed by the Portfolio Advisor or its affiliates, the
transactions generally will be executed as received, although a fund or advisory
account that does not direct trades to a specific broker ("free trades") usually
will have its order executed first, (ii) although all orders placed on behalf of
the Portfolio will be considered free trades, having an order placed first in
the market does not necessarily guarantee the most favorable price, and (iii)
purchases will be combined where possible for the purpose of negotiating
brokerage commissions, which in some cases might have a detrimental effect on
the price or volume of the security in a particular transaction as far as the
Portfolio is concerned.
g. The Portfolio Advisor may enter into arrangements with other persons
affiliated with the Portfolio Advisor for the provision of certain
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personnel and facilities to the Portfolio Advisor to better enable it to
fulfill its duties and obligations under this Agreement.
h. In the event of any reorganization or other change in the
Portfolio Advisor, its investment principals, supervisors or members of its
investment (or comparable) committee, the Portfolio Advisor shall give the
Advisor and the Trust's Board of Trustees written notice of such
reorganization or change within a reasonable time (but not later than 30
days) after such reorganization or change.
i. The Portfolio Advisor will bear its expenses of providing services
to the Portfolio pursuant to this Agreement except such expenses as are
undertaken by the Advisor or the Trust.
j. The Portfolio Advisor will manage the Portfolio Assets and the
investment and reinvestment of such assets so as to seek to comply with the
provisions of the 1940 Act and with Subchapter M of the Internal Revenue
Code of 1986, as amended.
3. COMPENSATION OF THE PORTFOLIO ADVISOR.
a. As compensation for the services to be rendered and duties
undertaken hereunder by the Portfolio Advisor, the Advisor will pay to
the Portfolio Advisor a monthly fee equal on an annual basis to 0.50% of
the first $150 million of the average daily net assets of the Portfolio,
and 0.45% of such average daily net assets in excess of $150 million.
b. The fee of the Portfolio Advisor hereunder shall be computed and
accrued daily and paid monthly. If the Portfolio Advisor serves in such
capacity for less than the whole of any period specified in Section 3a,
the fee to the Portfolio Advisor shall be prorated. For purposes of
calculating the Portfolio Advisor's fee, the daily value of the Portfolio's
net assets shall be computed by the same method as the Trust uses to
compute the net asset value of the Portfolio for purposes of purchases
and redemptions of interests thereof.
c. The Portfolio Advisor reserves the right to waive all or a part of
its fees hereunder.
4. ACTIVITIES OF THE PORTFOLIO ADVISOR. It is understood that the
Portfolio Advisor may perform investment advisory services for various other
clients, including other investment companies. Furthermore, it is understood
that the Portfolio Advisor may give advice, and take action, with respect to
its other clients that may differ from the advice given, or the time and nature
of action taken, with
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respect to the Portfolio. The Portfolio Advisor will report to the Board of
Trustees of the Trust (at regular quarterly meetings and at such other times as
such Board of Trustees reasonably shall request) (i) the financial condition
and prospects of the Portfolio Advisor, (ii) the nature and amount of
transactions affecting the Portfolio that involve the Portfolio Advisor and
affiliates of the Portfolio Advisor, (iii) information regarding any potential
conflicts of interest arising by reason of its continuing provision of advisory
services to the Portfolio and to its other accounts, and (iv) such other
information as the Board of Trustees shall reasonably request regarding the
Portfolio, the Portfolio's performance, the performance of other comparable
accounts to whom the Portfolio Advisor provides services, and the plans of, and
the capability of, the Portfolio Advisor with respect to providing future
services to the Portfolio and its other accounts. The Portfolio Advisor agrees,
on an ongoing basis, to notify the Advisor of any change in the individual(s)
responsible for day-to-day management of the Portfolio and any material change
in the investment strategies employed by the Portfolio Advisor in managing the
Portfolio. At least annually, the Portfolio Advisor shall report to the
Trustees the total number and type of such other accounts and the approximate
total asset value thereof (but not the identities of the beneficial owners of
such accounts). The Portfolio Advisor agrees to submit to the Trust a statement
defining its policies with respect to the allocation of investment
opportunities among the Portfolio and its other clients.
It is understood that the Portfolio Advisor may become interested in the
Trust as an interest holder or otherwise.
The Portfolio Advisor has supplied to the Advisor and the Trust copies of
its Form ADV with all exhibits and attachments thereto (including the Portfolio
Advisor's statement of financial condition) and will hereafter supply to the
Advisor, promptly upon the preparation thereof, copies of all amendments or
restatements of such document.
Nothing in this Agreement shall prevent the Portfolio Advisor, any parent,
subsidiary or affiliate, or any director or officer thereof, from acting as
investment advisor for any other person, firm, or corporation, and shall not in
any way limit or restrict the Portfolio Advisor or any of its directors,
officers, stockholders or employees from buying, selling or trading any
securities or commodities for its or their own account or for the account of
others for whom it or they may be acting, if such activities will not adversely
affect or otherwise impair the performance by the Portfolio Advisor of its
duties and obligations under this Agreement. The Portfolio Advisor will (i)
supply to the Advisor, upon the execution of this Agreement, with a true copy
of its currently effective Code of Ethics and policies regarding xxxxxxx
xxxxxxx and (ii) thereafter supply to Advisor copies of any amendments to or
restatements of such Code of Ethics or xxxxxxx xxxxxxx policies. The Portfolio
Advisor agrees to provide the Advisor, on a quarterly basis, a report with
respect to material violations of the Portfolio Advisor's Code of Ethics or
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xxxxxxx xxxxxxx policies by portfolio managers who have responsibility for
managing the Portfolio or a written statement indicating that no such violations
have occurred during the quarter. In addition, the Portfolio Advisor agrees to
provide to the Advisor other information concerning violations of its Code of
Ethics or xxxxxxx xxxxxxx policies to the same extent as it provides such
information to the Boards of Directors of its proprietary mutual funds. The
parties agree to be bound by the provisions of Rule 17j-1 under the 1940 Act as
it may be amended to the extent that the provisions of the Rule are stricter
than the provisions of this paragraph.
5. PROVISION OF INFORMATION BY THE ADVISOR. To facilitate the Portfolio
Advisor's fulfillment of its obligations under this Agreement, the Advisor
agrees (i) promptly to provide the Portfolio Advisor with all amendments or
supplements to the Trust's registration statements, its Agreement and
Declaration of Trust, and its By-Laws, (ii) on an ongoing basis, to notify the
Portfolio Advisor expressly in writing of each change in the fundamental and
nonfundamental investment policies of the Portfolio, (iii) to provide or cause
to be provided to the Portfolio Advisor on an ongoing basis such assistance as
may be reasonably requested by the Portfolio Advisor in connection with its
activities under this Agreement, including, without limitation, information
concerning the Portfolio, its available funds, or funds that may reasonably
become available for investment, and information as to the general condition of
the Portfolio's affairs, (iv) to provide or cause to be provided to the
Portfolio Advisor on an ongoing basis such information as is reasonably
requested by the Portfolio Advisor for performance by the Portfolio Advisor of
its obligations under this Agreement and the Portfolio Advisor shall not be in
breach of any term of this Agreement or be deemed to have acted negligently if
such alleged breach or negligent act is the result of the Advisor's failure to
provide or cause to be provided such requested information and the Portfolio
Advisor's reliance on the information most recently furnished to the Portfolio
Advisor, and (v) promptly to provide the Portfolio Advisor with any guidelines
and procedures applicable to the Portfolio Advisor or the Portfolio adopted from
time to time by the Board of Trustees of the Trust and all amendments thereto.
6. USE OF NAMES. Neither the Advisor nor the Trust shall use the name of
the Portfolio Advisor in any prospectus, sales literature or other material
relating to the Advisor or the Trust in any manner not approved in advance by
the Portfolio Advisor; provided, however, that the Portfolio Advisor will
approve all uses of its name which merely refer in accurate terms to its
appointment hereunder or which are required by the SEC or a state securities
commission; and provided further, that in no event shall such approval be
unreasonably withheld. The Portfolio Advisor shall not use the name of the
Advisor or the Trust in any material relating to the Portfolio Advisor in any
manner not approved in advance by the Advisor or the Trust, as the case may be;
provided, however, that the Advisor and the Trust shall each approve all uses of
their respective names which merely refer in accurate terms to the appointment
of the Portfolio Advisor hereunder or which are required
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by the SEC or a state securities commission; and, provided further, that in no
event shall such approval be unreasonably withheld. Upon termination of this
Agreement, the Advisor and the Trust shall immediately cease to use the name of
the Portfolio Advisor.
7. LIMITATION OF LIABILITY OF THE PORTFOLIO ADVISOR. Absent willful
misfeasance, bad faith, gross negligence, or reckless disregard of obligations
or duties hereunder on the part of the Portfolio Advisor, the Portfolio Advisor
shall not be subject to liability to the Advisor, the Trust or to any holder of
an interest in the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security. The Portfolio
Advisor shall not be liable to the Advisor or the Trust for any loss suffered as
a consequence of any action or inaction of other service providers to the Trust,
provided such action or inaction of such other service providers to the
Portfolio is not a result of the willful misconduct, bad faith or gross
negligence in the performance of, or from reckless disregard of, the duties of
the Portfolio Advisor under this Agreement. As used in this Section 7, the term
"Portfolio Advisor" shall include the Portfolio Advisor and/or any of its
affiliates and the directors, officers and employees of the Portfolio Advisor
and/or any of its affiliates.
8. LIMITATION OF TRUST'S LIABILITY. The Portfolio Advisor acknowledges
that it has received notice of and accepts the limitations upon the Trust's
liability set forth in its Declaration of Trust. The Portfolio Advisor agrees
that (i) the Trust's obligations to the Portfolio Advisor under this Agreement
(or indirectly under the Advisory Agreement) shall be limited, in any event to
the assets of the Portfolio and (ii) the Portfolio Advisor shall not seek
satisfaction of any such obligation from the holders of interests in the
Portfolio nor from any Trustee, officer, employee or agent of the Trust.
9. FORCE MAJEURE. The Portfolio Advisor shall not be liable for delays
or errors occurring by reason of circumstances beyond its control, including
but not limited to acts of civil or military authority, national emergencies,
work stoppages, fire, flood, catastrophe, acts of God, insurrection, war, riot,
or failure of communication or power supply. In the event of equipment
breakdowns beyond its control, the Portfolio Advisor shall take reasonable
steps to minimize service interruptions but shall have no liability with respect
thereto.
10. RENEWAL, TERMINATION AND AMENDMENT.
a. This Agreement shall continue in effect, unless sooner
terminated as hereinafter provided, until December 31, 1998; and it shall
continue thereafter provided that such continuance is specifically approved by
the parties and, in addition, at least annually by (i) the vote of
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the holders of a majority of the outstanding voting securities (as herein
defined) of the Portfolio or by vote of a majority of the Trust's Board of
Trustees and (ii) by the vote of a majority of the Trustees who are not
parties to this Agreement or interested persons of either the Advisor or
the Portfolio Advisor, cast in person at a meeting called for the purpose
of voting on such approval.
b. This Agreement may be terminated at any time, without payment of
any penalty, (i) by the Advisor, by the Trust's Board of Trustees or by a
vote of the majority of the outstanding voting securities of the
Portfolio, in any such case upon not less than 60 days' prior written
notice to the Portfolio Advisor and (ii) by the Portfolio Advisor upon not
less than 60 days' prior written notice to the Advisor and the Trust. This
Agreement shall terminate automatically in the event of its assignment.
c. This Agreement will also terminate upon written notice to the
other party that the other party is in material breach of the Agreement,
unless the other party in material breach of this Agreement cures such
breach to the reasonable satisfaction of the party alleging the breach
within 30 days after the written notice.
d. This Agreement may be amended at any time by the parties hereto,
subject to approval by the Trust's Board of Trustees and, if required by
applicable SEC rules and regulations, a vote of the majority of the
outstanding voting securities of the Portfolio affected by such change.
e. The terms "affiliated persons," "assignment," "interested persons"
and "majority of the outstanding voting securities" shall have the meaning
set forth for such terms in Section 2(a) of the 1940 Act.
11. SEVERABILITY AND INCORPORATED EFFECT. 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. In addition, where the effect of a requirement of the 1940
Act reflected in any provision of this Agreement is relaxed by a rule,
regulation or order of the SEC, whether of specific or general application,
such provision shall be deemed to incorporate the effect of such rule,
regulation or order.
12. NOTICE. Any notices under this Agreement shall be in writing
addressed and delivered personally (or by telecopy) or mailed postage-paid, to
the other party at such address as such other party may designate in accordance
with this paragraph for the receipt of such notice. Until further notice to the
other party, it is agreed that the address of the Trust and that of the Advisor
for this purpose
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shall be 000 Xxxx Xxxxxx, Xxxxxxxxxx, Xxxx 00000 and that the address of the
Portfolio Advisor shall be 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
13. MISCELLANEOUS. Each party agrees to perform such further actions and
execute such further documents as are necessary to effectuate the purposes
hereof. This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Ohio, or any applicable provisions of the
1940 Act. To the extent that the laws of the State of Ohio, or any of the
provisions in the Agreement, conflict with applicable provisions of the 1940
Act, the latter shall control. The captions in this Agreement are included for
convenience only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect.
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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.
TOUCHSTONE ADVISORS, INC.
Attest:
/s/ Xxxxx X. Xxxxxx By /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxx Xxxxxx X. Xxxxxxx, Xx.
Title: Vice President/CFO President
XXXXXXX XXXXXX INVESTMENTS, INC.
Attest:
/s/ Xxxx X. Xxxx By /s/ Xxxxxxxx X. Small
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Name: Xxxx X. Xxxx Name: Xxxxxxxx X. Small
Title: Vice President Title: Managing Director
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