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
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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'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
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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 (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
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Portfolio Advisor a monthly fee equal on an annual basis to 0.60% of
the first $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 _____________________________
Xxxxxx X. Xxxxxxx, Xx.
President
Attest:
-------------------------
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Secretary
OPCAP ADVISORS _________________
BY _____________________________
Name, President
Attest:
-------------------------
Secretary
0383878.02
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