EXHIBIT 5A
PORTFOLIO ADVISORY AGREEMENT
SELECT ADVISORS PORTFOLIOS
BALANCED PORTFOLIO
This PORTFOLIO ADVISORY AGREEMENT is made as of the ____ day of ________,
1997, by and between TOUCHSTONE ADVISORS, INC., an Ohio corporation (the
"Advisor"), and OpCap Advisors (the "Portfolio Advisor"), a subsidiary of
Xxxxxxxxxxx Capital, a Delaware general partnership.
WHEREAS, the Advisor has been organized to operate as an investment advisor
registered under the Investment Advisers Act of 1940, as amended, 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 Balanced
Portfolio (herein the "Portfolio"); and
WHEREAS, the Portfolio Advisor also is an investment advisor registered
under the Investment Advisers Act of 1940, as amended; 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 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 Investment Advisers Act of
1940 and shall otherwise comply in all 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 assets 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 assets of the Portfolio 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 request.
b. The Portfolio Advisor shall provide support to the Advisor with
respect to the marketing of the Portfolio, including but not limited to:
(i) permission to use the Portfolio Advisor's name as provided in Section
5, (ii) permission to use the past performance and investment history of
the Portfolio Advisor as the same is applicable to the Portfolio, and (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) permission to use
the names of clients to which the Portfolio Advisor provides investment
management services, subject to any restrictions imposed by clients on the
use of such names.
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
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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's primary objective shall be 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, indicating total
brokerage expenses, actual or imputed, as well as the services obtained in
consideration for such expenses, broken down by broker-dealer and
containing such information as the Board of Trustees reasonably shall
request.
d. The Advisor recognizes that, subject to the foregoing
provisions of this Section 2, Xxxxxxxxxxx Co. Inc. ("Opco"), an affiliate
of the Portfolio Advisor, will act as the regular broker for the portfolio
so long as it is lawful for it so to act and that Opco may be a major
recipient of brokerage commissions paid by the portfolio. Opco may effect
securities transactions for the portfolio only if (1) the commissions, fees
or other remuneration received or to be received by it are reasonable and
fair compared to the commissions, fees
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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 (2)
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.
e. 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.
f. 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.
g. 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.
h. The Portfolio Advisor will manage the Portfolio Assets and the
investment and reinvestment of such assets so as 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 0.60% of the
first
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$20 million of the average daily net assets of the Combined Portfolios,
0.50% of such average daily net assets in excess of $20 million and up to
$50 million and 0.40% of such average daily net assets in excess of $50
million.
b. "Combined Portfolios," for purposes of this Section 3, means the
combined assets of the Portfolio and the Balanced Portfolio of the Select
Advisors Variable Trust, to which portfolio the Portfolio Advisor also acts
as investment advisor.
c. The fee of the Portfolio Advisor hereunder shall be computed and
accrued daily. 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 net assets of the Combined
Portfolios shall be computed by the same method as the Trust and the Select
Advisors Variable Insurance Trust use, respectively, to compute the net
asset value of each such Portfolio for purposes of purchases and
redemptions of interests thereof.
d. 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. 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 services provided by the
Portfolio Advisor to the Portfolio as compared to its other accounts and the
plans of, and the capability of, the Portfolio Advisor with respect to providing
future services to the Portfolio and its other accounts. 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 business 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.
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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, and (iii)
report to the Board of Trustees not less often than quarterly with respect to
any violations of such Code of Ethics or xxxxxxx xxxxxxx policies by persons
covered thereby to the extent that such violations involve the assets or
activities of the Portfolio.
5. 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 by the SEC or a state
securities commission; and, provided further, that in no event shall such
approval be unreasonably withheld.
6. 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
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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. As used in this Section 6, 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.
7. 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.
8. 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.
9. RENEWAL, TERMINATION AND AMENDMENT.
a. This Agreement shall continue in effect, unless sooner terminated
as hereinafter provided, for a period of 12 months from the date hereof;
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 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.
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c. 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.
d. The terms "assignment," "interested persons" and "majority" of
the outstanding voting securities" shall have the meaning set forth for
such terms in the 1940 Act.
10. 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.
11. 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 shall be 000 Xxxx Xxxxxx, Xxxxxxxxxx, Xxxx 00000 and that the
address of the Portfolio Advisor shall be 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000.
12. 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. 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.
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.
BY
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Xxxxxx X. Xxxxxxx, Xx.
President
Attest:
-------------------------
Secretary
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OPCAP ADVISORS
-----------------
BY
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Name, President
Attest:
_________________________
Secretary
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