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Exhibit 8(c)(i)
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, and (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
material respects with all applicable laws and regulations, both state and
federal.
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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 restrictions imposed by these
clients on the use of such names or by the Advisers Act and the rules
adopted thereunder.
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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 consideration for such expenses, broken down by
broker-dealer and containing such information as the Board of Trustees
reasonably shall request.
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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 Adviser 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 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
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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 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
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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
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.
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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 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
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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 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 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 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 XXXXXX BY /s/ XXXXXX X. XXXXXXX, XX.
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Xxxxxx X. Xxxxxxx, Xx.
Name: Xxxxx Xxxxxx President
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Title: VP/CFO
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XXXXXXX XXXXXX INVESTMENTS, INC.
Attest:
/s/ XXXX X. XXXX BY /s/ XXXXXXXX X. SMALL
-------------------------------- ---------------------------------
Name: Xxxx X. Xxxx Name: Xxxxxxxx X. Small
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Title: Vice President Title: Managing Director
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