SUB-ADVISORY AGREEMENT
TOUCHSTONE INTERNATIONAL EQUITY FUND
TOUCHSTONE SERIES TRUST
This SUB-ADVISORY AGREEMENT is made as of January 1, 1999, by and
between TOUCHSTONE ADVISORS, INC., an Ohio corporation (the "Advisor"), and
CREDIT SUISSE ASSET MANAGEMENT, a New York general partnership (the
"Sub-Advisor").
WHEREAS, the Advisor is an investment advisor registered under the
Investment Advisers Act of 1940, as amended, and has been retained by Touchstone
Series Trust (formerly Select Advisors Trust A) (the "Trust"), a Massachusetts
business trust organized pursuant to a Declaration of Trust dated February 7,
1994 and registered as an open-end diversified management investment company
under the Investment Company Act of 1940 (the "1940 Act"), to provide investment
advisory services to the Touchstone International Equity Fund (the "Fund"); and
WHEREAS, the Sub-Advisor also is an investment advisor registered under
the Investment Advisers Act of 1940, as amended; and
WHEREAS, the Advisor desires to retain the Sub-Advisor to furnish it
with portfolio management services in connection with the Advisor's investment
advisory activities on behalf of the Fund, and the Sub-Advisor is willing to
furnish such services to the Advisor and the Fund;
NOW THEREFORE, in consideration of the terms and conditions hereinafter
set forth, it is agreed as follows:
1. Employment of the Sub-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
Sub-Advisor to manage the investment and reinvestment of those assets of the
Fund allocated to it by the Advisor (the "Fund 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 Sub-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 Sub-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 Sub-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 Fund.
2. Duties of the Sub-Advisor. The Sub-Advisor will provide the
following services and undertake the following duties:
a. The Sub-Advisor will manage the investment and reinvestment of the
assets of the Fund, subject to and in accordance with the investment
objectives, policies and restrictions of the Fund and any directions
which the Advisor or the Trust's Board of Trustees may give from time
to time with respect to the Fund. In furtherance of the foregoing, the
Sub-Advisor will make all determinations with respect to the
investment of the assets of the Fund and the purchase and sale of
portfolio securities and shall take such steps as may be necessary or
advisable to implement the same. The Sub-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 Sub-Advisor will render regular reports to the
Trust's Board of Trustees, to the Advisor and to BARRA RogersCasey,
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
Sub-Advisor). Such reports shall be made in such form and manner and
with respect to such matters regarding the Fund and the Sub-Advisor as
the Trust, the Advisor or BARRA RogersCasey, Inc. shall from time to
time reasonably request.
b. The Sub-Advisor shall provide support to the Advisor with respect to
the marketing of the Fund, consisting of: (i) permission to use the
Sub-Advisor's name as provided in Section 5, (ii) permission to use
the past performance and investment history of the Sub-Advisor as the
same is applicable to the Fund, (iii) access to the individual(s)
responsible for the management of the Fund for marketing conferences,
teleconferences and other activities involving the promotion of the
Fund, subject to the reasonable request of the Advisor and to the
limitation that the individual primarily responsible for management of
the Fund Assets for the Sub-Advisor will not be required to attend
more than one meeting of the Trust's Trustees in any one year, (iv)
permission to use biographical and historical data of the Sub-Advisor
and individual manager(s), and (v) permission to use the names of
clients to which the Sub-Advisor provides investment management
services, subject to any restrictions imposed by clients on the use of
such names.
c. The Sub-Advisor will, in the name of the Fund, 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
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registration statements may be in effect from time to time. In
connection with the placement of orders for the execution of portfolio
transactions, the Sub-Advisor will create and maintain all necessary
brokerage records of the Fund 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 Sub-Advisor's primary objective shall be to obtain the
most favorable price and execution available for the Fund, and in
placing such orders the Sub-Advisor may consider a number of factors,
including, without limitation, the overall direct net economic result
to the Fund (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 Sub-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 Sub-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 Sub-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 Sub-Advisor's overall
responsibilities with respect to discretionary accounts that it
manages. The Sub-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. In the event of any reorganization or other change in the Sub-Advisor,
its investment principals, supervisors or members of its investment
(or comparable) committee, the Sub-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. In addition, the Sub-Advisor will
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notify the Advisor of any change in the membership of the Sub-Advisor
within a reasonable time (but not more than 30 days) after such change
takes place.
e. The Sub-Advisor will bear its expenses of providing services to the
Fund pursuant to this Agreement except such expenses as are undertaken
by the Advisor or the Trust.
f. Based on account information regarding the Fund provided by the
Advisor, the Sub-Advisor will 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; provided, however, that with respect
to the provisions of the 1940 Act regarding transactions with
affiliates, the obligations of the Sub-Advisor shall be limited to
matters involving its own affiliates and such other persons as the
Advisor shall expressly identify as affiliated persons.
3. Compensation of the Sub-Advisor.
a. As compensation for the services to be rendered and duties undertaken
hereunder by the Sub-Advisor, the Advisor will pay to the Sub-Advisor
a monthly fee equal on an annual basis to 0.85% of the first $30
million of the average daily net assets of the Fund, 0.80% of the
average daily net assets of the Fund in excess of $30 million and up
to $50 million, 0.60% of the average daily net assets of the Fund in
excess of $50 million and up to $75 million, and 0.50% of the average
daily net assets of the Fund in excess of $75 million. Such fee shall
be computed and accrued daily. If the Sub-Advisor serves in such
capacity for less than the whole of any period specified in this
Section 3a, the compensation to the Sub-Advisor shall be prorated. For
purposes of calculating the Sub-Advisor's fee, the daily value of the
Fund's net assets shall be computed by the same method as the Trust
uses to compute the net asset value of the Fund for purposes of
purchases and redemptions of shares thereof.
b. The Sub-Advisor reserves the right to waive all or a part of its fees
hereunder.
4. Activities of the Sub-Advisor. It is understood that the Sub-Advisor
may perform investment advisory services for various other clients, including
other investment companies. The Sub-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) information reasonably requested by
such Board of Trustees regarding (i) the nature and amount of transactions
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affecting the Fund that involve the Sub-Advisor and affiliates of the
Sub-Advisor, (ii) any potential conflicts of interest arising by reason of its
continuing provision of advisory services to the Fund and to its other accounts,
and (iii) such other matters as the Board of Trustees shall reasonably request
regarding the Fund, the Fund's performance, the services provided by the
Sub-Advisor to the Fund as compared to its other accounts and the plans of, and
the capability of, the Sub-Advisor with respect to providing future services to
the Fund and its other accounts. The Sub-Advisor agrees to submit to the Trust a
statement defining its policies with respect to the allocation of business among
the Fund and its other clients.
It is understood that the Sub-Advisor may become interested in the
Trust as a shareholder or otherwise.
The Sub-Advisor has supplied to the Advisor and the Trust copies of its
Form ADV with all exhibits and attachments thereto (including the Sub-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.
5. Use of Names. Neither the Advisor nor the Trust shall use the name
of the Sub-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 Sub-Advisor; provided, however, that the Sub-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
Sub-Advisor shall not use the name of the Advisor or the Trust in any material
relating to the Sub-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 Sub-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 Sub-Advisor.
a. Absent willful misfeasance, bad faith, gross negligence, or reckless
disregard of obligations or duties hereunder on the part of the
Sub-Advisor, the Sub-Advisor shall not be subject to liability to the
Advisor, the Trust or to any shareholder in the 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 6, the term
"Sub-Advisor" shall include the Sub-Advisor and/or any of its
affiliates and the directors, officers and employees of the
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Sub-Advisor and/or any of its affiliates. b. The Trust or the Advisor
will indemnify the Sub-Advisor against, and hold it harmless from, any
and all losses, claims, damages, liabilities or expenses (including
reasonable counsel fees and expenses) resulting from its activities
under and pursuant to this Agreement, except to the extent that such
losses, claims, damages, liabilities or expenses result from the gross
negligence, bad faith or willful misfeasance of the Sub-Advisor or
from a breach of its obligations or duties hereunder. 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 or the Advisor 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 or the Advisor 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 Sub-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 Sub-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: (a) the Sub-Advisor shall provide security in form and
amount acceptable to the Trust for its undertaking; (b) the Trust is
insured against losses arising by reason of the advance; or (c) 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
Sub-Advisor will ultimately be found to be entitled to
indemnification.
7. Limitation of Trust's Liability. The Sub-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 Sub-Advisor agrees that (i) the
Trust's obligations to the Sub-Advisor under this Agreement (or indirectly under
the Advisory Agreement) shall be limited in any event to the assets of the Fund
and (ii) the Sub-Advisor shall not seek satisfaction of any such obligation from
the holders of shares of the Fund nor from any Trustee, officer, employee or
agent of the Trust.
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8. Force Majeure. The Sub-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 Sub-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, until December 31, 1999; 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 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 either the
Advisor or the Sub-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 Fund,
in any such case upon not less than 60 days' prior written notice to
the Sub-Advisor and (ii) by the Sub-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 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 Fund 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
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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 Sub-Advisor shall be One Citicorp Center, 000 Xxxx 00xx Xxxxxx,
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.
Attest:
/s/ Xxxxxxxx X. Xxxxxx BY /s/ Xxxxxx X. Xxxxxxx, Xx.
Xxxxxx X. Xxxxxxx, Xx.
Name: Xxxxxxxx X. Xxxxxx President
Title: Chief Compliance Officer
CREDIT SUISSE ASSET MANAGEMENT
Attest:
/s/ Xxxxxxx X. Xxxxxxxxx BY /s/ Xxx Xxxxxx
Name: Xxxxxxx X. Xxxxxxxxx Name: Xxx Xxxxxx
Title: Vice President Title: General Counsel
