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EXHIBIT (d1)
INVESTMENT ADVISORY AGREEMENT
TOUCHSTONE SERIES TRUST
INVESTMENT ADVISORY AGREEMENT, dated as of January 1, 1999, by and between
TOUCHSTONE ADVISORS, INC., an Ohio corporation (the "Advisor"), and TOUCHSTONE
SERIES TRUST (formerly Select Advisors Trust A), a Massachusetts business trust
created pursuant to a Declaration of Trust dated February 7, 1994, as amended
from time to time (the "Trust").
WHEREAS, the Trust is an open-end diversified management investment
company registered under the Investment Company Act of 1940, as amended, (the
"1940 Act"); and
WHEREAS, shares of beneficial interest in the Trust are divided into
separate series (each, along with any series which may in the future be
established, a "Fund"); and
WHEREAS, the Trust desires to avail itself of the services,
information, advice, assistance and facilities of an investment advisor and to
have an investment advisor perform for it various investment advisory and
research services and other management services; and
WHEREAS, the Advisor is an investment advisor registered under the
Investment Advisers Act of 1940, as amended, and desires to provide investment
advisory services to the Trust;
NOW THEREFORE, in consideration of the terms and conditions hereinafter
set forth, it is agreed as follows:
1. EMPLOYMENT OF THE ADVISOR. The Trust hereby employs the Advisor to
manage the investment and reinvestment of the assets of each Fund subject to the
control and direction of the Trust's Board of Trustees, for the period on the
terms hereinafter set forth. The Advisor hereby accepts such employment and
agrees during such period to render the services and to assume the obligations
herein set forth for the compensation herein provided. The Advisor shall for all
purposes herein be deemed to be 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.
2. OBLIGATIONS OF AND SERVICES TO BE PROVIDED BY THE ADVISOR. In
providing the services and assuming the obligations set forth herein, the
Advisor may, at its expense, employ one or more subadvisors for any Fund. Any
agreement between the Advisor and a subadvisor shall be subject to the renewal,
termination and
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amendment provisions of paragraph 10 hereof. The Advisor undertakes to provide
the following services and to assume the following obligations:
a) The Advisor will manage the investment and reinvestment of the
assets of each Fund, subject to and in accordance with the
respective investment objectives and policies of each Fund and
any directions which the Trust's Board of Trustees may issue
from time to time. In pursuance of the foregoing, the Advisor
may engage separate investment advisors ("Sub-Advisor(s)") to
make all determinations with respect to the investment of the
assets of each Fund, to effect the purchase and sale of
portfolio securities and to take such steps as may be necessary
to implement the same. Such determination and services by each
Sub-Advisor shall also include determining the manner in which
voting rights, rights to consent to corporate action and any
other rights pertaining to the portfolio securities shall be
exercised. The Advisor shall, and shall cause each Sub-Advisor
to, render regular reports to the Trust's Board of Trustees
concerning the Trust's and each Fund's investment activities.
b) The Advisor shall, or shall cause the respective Sub-Advisor(s)
to place orders for the execution of all portfolio
transactions, in the name of the respective Fund and 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
amended from time to time. In connection with the placement of
orders for the execution of portfolio transactions, the Advisor
shall create and maintain (or cause the Sub-Advisors to create
and maintain) all necessary brokerage records for each Fund,
which records shall comply 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 (or
Sub-Advisor) for the periods and in the places required by Rule
31a-2 under the 1940 Act.
c) In the event of any reorganization or other change in the
Advisor, its investment principals, supervisors or members of
its investment (or comparable) committee, the Advisor shall
give 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.
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d) The Advisor shall bear its expenses of providing services to
the Trust pursuant to this Agreement except such expenses as
are undertaken by the Trust. In addition, the Advisor shall pay
the salaries and fees, if any, of all Trustees, officers and
employees of the Trust who are affiliated persons, as defined
in Section 2(a)(3) of the 1940 Act, of the Advisor.
e) The Advisor will manage, or will cause the Sub-Advisors to
manage, the Fund 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. EXPENSES. The Trust shall pay the expenses of its operation,
including but not limited to (i) charges and expenses for Trust accounting,
pricing and appraisal services and related overhead, (ii) the charges and
expenses of the Trust's auditors; (iii) the charges and expenses of any
custodian, transfer agent, plan agent, dividend disbursing agent and registrar
appointed by the Trust with respect to the Funds; (iv) brokers' commissions, and
issue and transfer taxes, chargeable to the Trust in connection with securities
transactions to which the Trust is a party; (v) insurance premiums, interest
charges, dues and fees for Trust membership in trade associations and all taxes
and fees payable by the Trust to federal, state or other governmental agencies;
(vi) fees and expenses involved in registering and maintaining registrations of
the Trust and/or shares of the Trust with the SEC, state or blue sky securities
agencies and foreign countries, including the preparation of Prospectuses and
Statements of Additional Information for filing with the SEC; (vii) all expenses
of meetings of Trustees and of shareholders of the Trust and of preparing,
printing and distributing prospectuses, notices, proxy statements and all
reports to shareholders and to governmental agencies; (viii) charges and
expenses of legal counsel to the Trust; (ix) compensation of Trustees of the
Trust; (x) the cost of preparing and printing share certificates; and (xi)
interest on borrowed money, if any.
4. COMPENSATION OF THE ADVISOR.
a) As compensation for the services rendered and obligations
assumed hereunder by the Advisor, the Trust shall pay to the
Advisor monthly a fee that is equal on an annual basis to that
percentage of the average daily net assets of each Fund set
forth on Schedule 1 attached hereto (and with respect to any
future Fund, such percentage as the Trust and the Advisor may
agree to from time to time). Such fee shall be computed and
accrued daily. If the Advisor serves as investment advisor for
less than the whole of any period specified in this Section 4a,
the compensation to the Advisor shall be prorated. For purposes
of calculating the Advisor's fee, the daily value of each
Fund's net assets shall be computed by the same method as the
Trust uses to compute the net asset value of that Fund.
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b) The Advisor will pay all fees owing to each Sub-Advisor, and
the Trust shall not be obligated to the Sub-Advisors in any
manner with respect to the compensation of such Sub-Advisors.
c) The Advisor reserves the right to waive all or a part of its
fee.
5. ACTIVITIES OF THE ADVISOR. The services of the Advisor to the Trust
hereunder are not to be deemed exclusive, and the Advisor shall be free to
render similar services to others. It is understood that the Trustees and
officers of the Trust are or may become interested in the Advisor as
stockholders, officers or otherwise, and that stockholders and officers of the
Advisor are or may become similarly interested in the Trust, and that the
Advisor may become interested in the Trust as a shareholder or otherwise.
6. USE OF NAMES. The Trust will not use the name of the Advisor in any
prospectus, sales literature or other material relating to the Trust in any
manner not approved prior thereto by the Advisor; except that the Trust may use
such name in any document which merely refers in accurate terms to its
appointment hereunder or in any situation which is required by the SEC or a
state securities commission; and provided further, that in no event shall such
approval be unreasonably withheld. The Advisor will not use the name of the
Trust in any material relating to the Advisor in any manner not approved prior
thereto by the Trust; except that the Advisor may use such name in any document
which merely refers in accurate terms to the appointment of the Advisor
hereunder or in any situation which is required by the SEC or a state securities
commission. In all other cases, the parties may use such names to the extent
that the use is approved by the party named, it being agreed that in no event
shall such approval be unreasonably withheld.
The Trustees of the Trust acknowledge that, in consideration of the
Advisor's assumption of certain organization expenses of the Trust and of the
various Funds, the Advisor has reserved for itself the rights to the name
"Touchstone Series Trust" (or any similar names) and that use by the Trust of
such name shall continue only with the continuing consent of the Advisor, which
consent may be withdrawn at any time, effective immediately, upon written notice
thereof to the Trust.
7. LIMITATION OF LIABILITY OF THE ADVISOR.
a) Absent willful misfeasance, bad faith, gross negligence, or
reckless disregard of obligations or duties hereunder on the
part of the Advisor, the Advisor shall not be subject to
liability to the Trust or to any holder of an interest in any
Fund 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 7, the term "Advisor" shall include
Touchstone
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Advisors, Inc. and/or any of its affiliates and the directors,
officers and employees of Touchstone Advisors, Inc. and/or any
of its affiliates.
b) The Trust will indemnify the Advisor against, and hold it
harmless from, any and all losses, claims, damages, liabilities
or expenses (including reasonable counsel fees and expenses)
resulting from acts or omissions of the Trust. Indemnification
shall be made only after: (i) a final decision on the merits by
a court or other body before whom the proceeding was brought
that the Trust was liable for the damages claimed or (ii) in
the absence of such a decision, a reasonable determination
based upon a review of the facts, that the Trust was liable for
the damages claimed, which determination shall be made by
either (a) the vote of a majority of a quorum of Trustees of
the Trust who are neither "interested persons" of the Trust nor
parties to the proceeding ("disinterested non-party Trustees")
or (b) an independent legal counsel satisfactory to the parties
hereto, whose determination shall be set forth in a written
opinion. The Advisor shall be entitled to advances from the
Trust for payment of the reasonable expenses incurred by it in
connection with the matter as to which it is seeking
indemnification in the manner and to the fullest extent that
would be permissible under the applicable provisions of the
General Corporation Law of Ohio. The Advisor shall provide to
the Trust a written affirmation of its good faith belief that
the standard of conduct necessary for indemnification under
such law has been met and a written undertaking to repay any
such advance if it should ultimately be determined that the
standard of conduct has not been met. In addition, at least one
of the following additional conditions shall be met: (i) the
Advisor shall provide security in form and amount acceptable to
the Trust for its undertaking; (ii) the Trust is insured
against losses arising by reason of the advance; or (iii) a
majority of a quorum of the Trustees of the Trust, the members
of which majority are disinterested non-party Trustees, or
independent legal counsel in a written opinion, shall have
determined, based on a review of facts readily available to the
Trust at the time the advance is proposed to be made, that
there is reason to believe that the Advisor will ultimately be
found to be entitled to indemnification.
8. LIMITATION OF TRUST'S LIABILITY. The 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 Advisor agrees that the Trust's
obligations hereunder in any case shall be limited to the Trust and to its
assets and that the Advisor shall not seek satisfaction of any such obligation
from the holders of the shares of any Fund nor from any Trustee, officer,
employee or agent of the Trust.
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9. FORCE MAJEURE. The 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 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, for a period of twelve
months from the date hereof and it shall continue indefinitely
thereafter as to each Fund, provided that such continuance is
specifically approved by the parties hereto and, in addition,
at least annually by (i) the vote of holders of a majority of
the outstanding voting securities of the affected Fund 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 the 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, with respect to
any Fund(s), without payment of any penalty, by the Trust's
Board of Trustees or by a vote of the majority of the
outstanding voting securities of the affected Fund(s) upon 60
days' prior written notice to the Advisor and by the Advisor
upon 60 days' prior written notice to the Trust.
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
any Fund affected by such change. This Agreement shall
terminate automatically in the event of its assignment.
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.
11. SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
12. MISCELLANEOUS. Each party agrees to perform such further actions
and execute such further documents as are necessary to effectuate the purposes
hereof.
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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.
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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.
Pursuant to the Trust's Declaration of Trust, dated as of February 7, 1994, the
obligations of this Agreement are not binding upon any of the Trustees or
shareholders of the Trust individually, but bind only the Trust estate.
TOUCHSTONE SERIES TRUST
By:
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TOUCHSTONE ADVISORS, INC.
By:
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SCHEDULE 1
Touchstone Emerging Growth Fund 0.80%
Touchstone International Equity Fund 0.95%
Touchstone Growth & Income Fund 0.80% on the first $150 million of
average daily net assets and 0.75%
on such assets in excess of $150
million
Touchstone Balanced Fund 0.80%
Touchstone Income Opportunity Fund 0.65%
Touchstone Bond Fund 0.55%
Touchstone Value Plus Fund 0.75%
Touchstone Standby Income Fund 0.25%
