Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or
240.14a-12
Countrywide Strategic Trust
- ------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- ------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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<PAGE>
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
--------------------------------------------
2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
COUNTRYWIDE STRATEGIC TRUST
312 WALNUT STREET, 21ST FLOOR
CINCINNATI, OHIO 45202
March 14, 2000
Dear Shareholder:
You are cordially invited to attend a Special Meeting of Shareholders
of Countrywide Strategic Trust to be held on Wednesday, April 19, 2000 at 10:00
a.m., Eastern time, at the Trust's offices at 312 Walnut Street, 21st Floor
Board Room, Cincinnati, Ohio 45202.
As you may recall, on October 29, 1999 all of the stock of Countrywide
Investments, the Trust's investment advisor, was purchased by Fort Washington
Investment Advisors. Fort Washington Investment Advisors is a member of The
Western-Southern Enterprise, a dynamic group of financial services companies
owned by The Western and Southern Life Insurance Company. Fort Washington
Investment Advisors is a registered investment advisor and the sub-advisor to
several funds in the Touchstone mutual fund complex. Another member of The
Western-Southern Enterprise is Touchstone Advisors, a registered investment
advisor and the investment advisor to all funds in the Touchstone mutual fund
complex.
The Board of Trustees of Countrywide Strategic Trust has approved a
series of transactions designed to consolidate the Touchstone and Countrywide
mutual fund complexes. These transactions include appointing Touchstone Advisors
to serve as the investment advisor to each Fund in the Trust and appointing Fort
Washington Investment Advisors to serve as the sub-advisor to the Utility Fund
and the Equity Fund. Due to the change in investment advisor, the Board has also
approved new sub-advisory agreements between Touchstone Advisors and
Mastrapasqua & Associates, the sub-advisor to the Growth/Value Fund and the
Aggressive Growth Fund. The appointment of a new investment advisor and a
sub-advisor will not result in an increase in advisory fees, nor will it result
in a change in the personnel currently responsible for the day-to-day management
of the Funds. The Board has also approved a change in the independent public
accountants for the Trust.
The Investment Company Act requires that shareholders approve the
proposed advisory and sub-advisory agreements. The Investment Company Act also
requires that shareholders approve the proposed change in independent public
accountants. Accordingly, you are being asked to vote on these 3 matters.
The Board of Trustees has given full and careful consideration to each
of these matters and has concluded that the proposals are in the best interests
of each Fund and its shareholders. The Board of Trustees therefore recommends
that you vote "FOR" the matters discussed in this proxy statement.
Continued on next page
<PAGE>
YOUR VOTE IS IMPORTANT. TO ASSURE YOUR REPRESENTATION AT THE MEETING,
PLEASE VOTE BY SIGNING AND DATING THE ENCLOSED PROXY AND RETURNING IT PROMPTLY
IN THE ACCOMPANYING ENVELOPE, WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE
MEETING. YOU CAN ALSO VOTE BY TELEPHONE BY FOLLOWING THE INSTRUCTIONS ON THE
ENCLOSED PROXY. IF YOU ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE
YOUR SHARES IN PERSON.
Very truly yours,
/s/ Robert H. Leshner
Robert H. Leshner
President
<PAGE>
COUNTRYWIDE STRATEGIC TRUST
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 19, 2000
NOTICE IS HEREBY GIVEN that a special meeting of shareholders of
Countrywide Strategic Trust (the "Trust"), will be held at the Trust's offices
at 312 Walnut Street, 21st Floor Board Room, Cincinnati, Ohio 45202, on
Wednesday, April 19, 2000 at 10:00 a.m., Eastern time, to consider and vote on
the following matters:
1. Approval of a new investment advisory agreement for each Fund
of the Trust with Touchstone Advisors, Inc. to become
effective on May 1, 2000. NO FEE INCREASE IS PROPOSED.
2. (UTILITY FUND AND EQUITY FUND) Approval of a new sub-advisory
agreement with Fort Washington Investment Advisors, Inc. to
become effective on May 1, 2000.
(GROWTH/VALUE FUND AND AGGRESSIVE GROWTH FUND) Approval of a
new sub-advisory agreement with Mastrapasqua & Associates to
become effective on May 1, 2000.
THE FUNDS DO NOT PAY ANY FEES UNDER THESE AGREEMENTS.
3. Approval of the termination of the employment of the Trust's
current independent public accountants and the selection of
Ernst & Young LLP as the Trust's independent public
accountants for the fiscal year ending March 31, 2000.
4. To transact any other business, not currently contemplated,
that may properly come before the meeting in the discretion of
the proxies or their substitutes.
Shareholders of record at the close of business on February 28, 2000
are entitled to notice of and to vote at this meeting or any adjournment
thereof.
By order of the Board of Trustees,
/s/ Tina D. Hosking
Tina D. Hosking
Secretary
March 14, 2000
YOUR VOTE IS IMPORTANT
TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE VOTE BY SIGNING AND DATING
THE ENCLOSED PROXY AND RETURNING IT IN THE ACCOMPANYING ENVELOPE, WHETHER OR NOT
YOU EXPECT TO BE PRESENT AT THE MEETING. YOU CAN ALSO VOTE BY PHONE BY FOLLOWING
THE INSTRUCTIONS ON THE ENCLOSED PROXY. IF YOU ATTEND THE MEETING, YOU MAY
REVOKE YOUR PROXY AND VOTE YOUR SHARES IN PERSON.
<PAGE>
COUNTRYWIDE STRATEGIC TRUST
312 WALNUT STREET, 21ST FLOOR
CINCINNATI, OHIO 45202
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 19, 2000
-------------------
PROXY STATEMENT
--------------------
This proxy statement is furnished in connection with the solicitation
of proxies by the Board of Trustees of Countrywide Strategic Trust (the "Trust")
for use at the special meeting of shareholders to be held at the Trust's offices
at 312 Walnut Street, 21st Floor Board Room, Cincinnati, Ohio 45202 at 10:00
a.m. on Wednesday, April 19, 2000, and at any adjournment(s) thereof. This proxy
statement and form of proxy were first mailed to shareholders on or about March
15, 2000.
The Board of Trustees of the Trust has approved a series of
transactions designed to consolidate the Touchstone and Countrywide mutual fund
complexes. These transactions include appointing Touchstone Advisors, Inc. to
serve as the investment advisor to each Fund in the Trust and appointing Fort
Washington Investment Advisors, Inc. to serve as the sub-advisor to the Utility
Fund and the Equity Fund. The appointment of a new investment advisor and a
sub-advisor will not result in an increase in advisory fees, nor will it result
in a change in the personnel currently responsible for the day-to-day management
of the Funds. The Board has also approved a change in the independent public
accountants for the Trust. Therefore, you are being asked to consider the
following proposals:
1. Approval of a new investment advisory agreement for each Fund
of the Trust with Touchstone Advisors, Inc. to become
effective May 1, 2000.
2. Approval of a new sub-advisory agreement for the Utility Fund
and the Equity Fund of the Trust with Fort Washington
Investment Advisors, Inc. to become effective May 1, 2000.
Approval of a new sub-advisory agreement for the Growth/Value
Fund and the Aggressive Growth Fund of the Trust with
Mastrapasqua & Associates, Inc. to become effective May 1,
2000.
3. Approval of the termination of the employment of the Trust's
current independent public accountants and the selection of
Ernst & Young LLP as the Trust's independent public
accountants for the fiscal year ending March 31, 2000.
<PAGE>
A COPY OF THE TRUST'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED MARCH 31,
1999, INCLUDING FINANCIAL STATEMENTS AND SCHEDULES, IS AVAILABLE AT NO CHARGE BY
MAKING A WRITTEN REQUEST DIRECTED TO MS. TINA D. HOSKING, SECRETARY, COUNTRYWIDE
STRATEGIC TRUST, 312 WALNUT STREET, 21ST FLOOR, CINCINNATI, OHIO 45202-4094, OR
BY CALLING THE TRUST NATIONWIDE TOLL-FREE AT 800-543-0407 OR IN CINCINNATI AT
(513) 629-2050.
PROPOSAL 1
NEW ADVISORY AGREEMENT WITH TOUCHSTONE ADVISORS
Background
- ----------
Countrywide Investments, Inc. currently serves as the investment
advisor to each series of the Trust. Countrywide Investments is a wholly-owned
subsidiary of Countrywide Financial Services, Inc., which is a wholly-owned
subsidiary of Fort Washington Investment Advisors.
Touchstone Advisors currently serves as the investment advisor to each
series of Touchstone Series Trust and to each series of Touchstone Variable
Series Trust. Touchstone Advisors is a indirect wholly-owned subsidiary of
Western-Southern Life Assurance Company, which is a wholly-owned subsidiary of
The Western and Southern Life Insurance Company.
Fort Washington Investment Advisors currently serves as sub-advisor to
3 series of Touchstone Series Trust and 4 series of Touchstone Variable Series
Trust. Fort Washington Investment Advisors is a wholly-owned subsidiary of The
Western and Southern Life Insurance Company.
As part of a consolidation of the Touchstone and Countrywide mutual
fund complexes, management of Countrywide Investments, Touchstone Advisors and
Fort Washington Investment Advisors has proposed a reorganization plan. Under
the reorganization plan, Touchstone Advisors will serve as the investment
advisor to each Fund in the Countrywide complex and Fort Washington Investment
Advisors will serve as the sub-advisor to each Fund in the Countrywide complex,
except for the Growth/Value Fund and the Aggressive Growth Fund, which already
have a sub-advisor. Countrywide Investments will no longer serve as the
investment advisor to any Fund in the Countrywide complex, but the employees of
Countrywide Investments who currently provide investment advisory services to
the Funds will continue to do so in their capacity as employees of Fort
Washington Investment Advisors.
The Present Advisory Agreements
- -------------------------------
Countrywide Investments, 312 Walnut Street, Cincinnati, Ohio 45202,
currently provides investment advisory services to the Trust. It has entered
into a separate management agreement with each series of the Trust (the "Present
Advisory Agreements"), including:
<PAGE>
Utility Fund
Equity Fund
Growth/Value Fund
Aggressive Growth Fund
The Present Advisory Agreements for the Utility Fund and the Equity
Fund are substantially identical to each other in all respects. The Present
Advisory Agreements for the Utility Fund and the Equity Fund require Countrywide
Investments to furnish an investment program for each Fund and to determine
which securities to purchase and sell and what portion of a Fund's assets to
keep uninvested. The Present Advisory Agreements for the Growth/Value Fund and
the Aggressive Growth Fund are substantially identical to each other in all
respects. The Present Advisory Agreements for the Growth/Value Fund and the
Aggressive Growth Fund require Countrywide Investments to supervise the general
management and investment of the assets of the Funds and to provide overall
investment strategies for the Funds. The Present Advisory Agreements for the
Growth/Value Fund and the Aggressive Growth Fund permit Countrywide Investments
to appoint a sub-advisor to make investment decisions for the Funds.
The Present Advisory Agreements were last approved by the Board of
Trustees, including a majority of the Trustees who are not interested persons,
as defined in the Investment Company Act of 1940 as amended, of the Trust (the
"Independent Trustees") on September 8, 1999. Each of the Present Advisory
Agreements was last approved by shareholders of the applicable Fund on October
27, 1999 and became effective on October 29, 1999. The Present Advisory
Agreements were submitted to shareholders of the Funds in 1999 in connection
with the acquisition of Countrywide Investments by Fort Washington Investment
Advisors.
During the fiscal year ended March 31, 1999, the Funds paid to
Countrywide Investments advisory fees as shown in the table below.
Advisory Fees
Paid Annual Advisory Fee Rate
Utility Fund $326,576 .75% of average net assets
Equity Fund $375,212 .75% of average net assets
Growth/Value Fund $254,571 1.00% of average net assets
Aggressive Growth Fund $125,575 1.00% of average net assets
The New Advisory Agreement
- --------------------------
Under the reorganization plan, the Trust, on behalf of each Fund, will
enter into a new investment advisory agreement with Touchstone Advisors (the
"New Advisory Agreement"). The New Advisory Agreement appoints Touchstone
<PAGE>
Advisors 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. The New
Advisory Agreement authorizes Touchstone Advisors to employ, at its own expense,
one or more sub-advisors for any Fund. Touchstone Advisors intends to enter into
sub-advisory agreements with Fort Washington Investment Advisors, on behalf of
the Utility Fund and the Equity Fund, and sub-advisory agreements with
Mastrapasqua & Associates, on behalf of the Growth/Value Fund and the Aggressive
Growth Fund (the "New Sub-Advisory Agreements").
Touchstone Advisors will receive from the Utility Fund and the Equity
Fund a fee at an annual rate of 0.75% of the average daily net assets of the
Fund up to $200 million; 0.70% of such assets from $200 million to $500 million;
and 0.50% of such assets in excess of $500 million. Touchstone Advisors will
receive from the Growth/Value Fund and the Aggressive Growth Fund a fee at an
annual rate of 1.00% of the average daily net assets of the Fund up to $50
million; 0.90% of such assets from $50 million to $100 million; 0.80% of such
assets from $100 million to $200 million; and 0.75% of such assets in excess of
$200 million. These are the same fees that Countrywide Investments currently
receives from each Fund under the Present Advisory Agreements.
The New Advisory Agreement differs materially from the Present Advisory
Agreements in the following ways:
o The New Advisory Agreement authorizes Touchstone Advisors to
employ, at its expense, one or more sub-advisors for any Fund.
Each sub-advisor will make all determinations with respect to the
investment of assets and will place orders for the execution of
portfolio transactions. Although the Present Advisory Agreements
for the Growth/Value Fund and the Aggressive Growth Fund contain
similar provisions, the Present Advisory Agreements for the
Utility Fund and the Equity Fund do not contain similar
provisions.
o The New Advisory Agreement provides that Touchstone Advisors will
pay the salaries and fees of all Trustees, officers and employees
of the Trust who are affiliates of Touchstone Advisors, while the
Present Advisory Agreements provide that Countrywide Investments
will pay the salaries and fees of any persons rendering services
to the Funds who are officers, directors, stockholders or
employees of Countrywide Investments.
o The Present Advisory Agreements provide that Countrywide
Investments will pay all advertising and promotion expenses
related to the sale and distribution of the Funds' shares which
are not assumed by the Funds under their plans of distribution.
The New Advisory Agreement does not provide that Touchstone
Advisors will pay such costs. Touchstone Securities, Inc., the
Trust's principal underwriter, will pay all advertising and
promotion expenses related to the sale and distribution of the
Funds' shares which are not assumed by the Funds under their plans
of distribution.
<PAGE>
o The New Advisory Agreement contains a clause that relieves
Touchstone Advisors from liability for delays or errors beyond its
control, such as acts of God, war or failure of communication or
power supply. The Present Advisory Agreements do not contain a
similar provision.
o The New Advisory Agreement may not be amended unless approved by
the Board of Trustees, and approved by shareholders if required by
applicable SEC rules and regulations. The Present Advisory
Agreements may not be amended unless approved by the Board of
Trustees and by shareholders.
o The Present Advisory Agreements direct Countrywide Investments (or
Mastrapasqua & Associates) to seek best qualitative execution when
selecting brokers and dealers to execute purchase and sale
transactions on behalf of the Funds and authorize Countrywide
Investments (or Mastrapasqua) to pay brokers who also provide
research services a higher commission than another broker would
charge if Countrywide Investments (or Mastrapasqua) determines
that the amount of commission is reasonable in relation to the
value of the brokerage and research services provided. The
Present Advisory Agreements also authorize Countrywide Investments
(or Mastrapasqua) to give consideration to sales of shares of the
Funds as a factor in the selection of brokers and dealers. The
New Advisory Agreement does not contain similar provisions;
however substantially similar provisions are contained in the New
Sub-Advisory Agreements.
If the New Advisory Agreement is approved by shareholders of a Fund and
a New Sub-Advisory Agreement is approved by shareholders of that Fund, the New
Advisory Agreement will become effective on May 1, 2000. The New Advisory
Agreement will continue in effect for an initial period of two years and from
year to year thereafter, provided that its continuance is specifically approved
(1) by the Board of Trustees or (2) by a vote of a majority (as defined in the
Investment Company Act) of the outstanding shares of a Fund. In either event the
continuance of the New Advisory Agreement must also be approved by a majority of
the Independent Trustees, by a vote cast in person at a meeting called for the
purpose of voting on the continuance.
The New Advisory Agreement may be terminated at any time upon 60 days'
written notice, without payment of any penalty (1) by the Board of Trustees, (2)
by a vote of the majority of the outstanding voting securities of the affected
Fund or (3) by Touchstone Advisors. The New Advisory Agreement will
automatically terminate in the event of its assignment.
The New Advisory Agreement provides that Touchstone Advisors will not
be liable for any act or omission in connection with the services that it
provides to a Fund or for any losses that may be sustained in the purchase,
holding or sale of any security, absent willful misfeasance, bad faith, gross
negligence, or reckless disregard of the obligations or duties of Touchstone
Advisors. The Present Advisory Agreements contain provisions that are
substantially similar to those in the New Advisory Agreement.
<PAGE>
The form of the New Advisory Agreement for the Funds is attached as
Exhibit A. You should read the agreement. The description in this Proxy
Statement of the New Advisory Agreement is only a summary.
If the New Advisory Agreement is not approved by shareholders of a
Fund, Countrywide Investments will continue to serve as the investment advisor
to that Fund pursuant to the terms of the applicable Present Advisory Agreement.
If the New Advisory Agreement is approved by shareholders of a Fund but the New
Sub-Advisory Agreement is not approved by shareholders of that Fund, Countrywide
Investments will continue to serve as the investment advisor to that Fund
pursuant to the terms of the applicable Present Advisory Agreement.
INFORMATION CONCERNING TOUCHSTONE ADVISORS
- ------------------------------------------
Touchstone Advisors, located at 311 Pike Street, Cincinnati, Ohio
45202, is a wholly-owned subsidiary of IFS Financial Services, Inc. IFS
Financial Services, also located at 311 Pike Street, Cincinnati, Ohio 45202, is
a wholly-owned subsidiary of Western-Southern Life Assurance Company, which is a
wholly-owned subsidiary of The Western and Southern Life Insurance Company.
Western-Southern Life Assurance Company and The Western and Southern Life
Insurance Company are both located at 400 Broadway, Cincinnati, Ohio 45202.
The table below gives the name, address and principal occupation of
each current director and principal executive officer of Touchstone Advisors.
Jill T. McGruder is also a Trustee of the Trust.
<TABLE>
<S> <C> <C>
Name and Address Position with Touchstone Principal Occupation
- -------------------------------------- ---------------------------------- --------------------------------------------
Jill Tripp McGruder President, Chief Executive President, Chief Executive Officer and
311 Pike Street Officer and Director Director of IFS Financial Services, Inc.
Cincinnati, OH 45202 and Touchstone Securities, Inc.
Director of Countrywide Investments
Senior Vice President of The Western and
Southern Life Insurance Company
Teresa Ann Siegel Vice President and Chief Chief Financial Officer of IFS Financial
311 Pike Street Financial Officer Services, Inc.
Cincinnati, OH 45202
Patricia Jean Wilson Chief Compliance Officer Chief Compliance Officer of Touchstone
311 Pike Street Securities, Inc.
Cincinnati, OH 45202 Director of Compliance of IFS Financial
Services, Inc.
Donald Joseph Wuebbling Director Director of Touchstone Securities, Inc.
400 Broadway Vice President and General Counsel of The
Cincinnati, OH 45202 Western and Southern Life Insurance Company
<PAGE>
James Norman Clark Director Director of Touchstone Securities, Inc.
311 Pike Street Executive Vice President and Director of
Cincinnati, OH 45202 The Western and Southern Life Insurance
Company
William Francis Ledwin Director President and Director of Fort Washington
420 East Fourth Street Investment Advisors
Cincinnati, OH 45202 Director of Countrywide Investments
Vice President and Chief Investment
Officer of Columbus Life Insurance Company
Senior Vice President and Chief Investment
Officer of The Western and Southern Life
Insurance Company
</TABLE>
Touchstone Advisors serves as investment advisor to the Touchstone
funds listed in Exhibit D, each of which is a series of a registered investment
company. The funds listed in Exhibit D have investment objectives similar to
those of the Funds. Exhibit D also includes information about the net assets,
advisory fee and sub-advisory fee of these funds.
PROPOSAL 2
NEW SUB-ADVISORY AGREEMENTS
The New Advisory Agreement provides that Touchstone Advisors may employ
one or more sub-advisors for any Fund. If the New Advisory Agreement is approved
by shareholders, Touchstone Advisors will appoint Fort Washington Investment
Advisors to serve as the sub-advisor to the Utility Fund and the Equity Fund and
Mastrapasqua & Associates to serve as the sub-advisor to the Growth/Value Fund
and the Aggressive Growth Fund. Fort Washington Investment Advisors and
Mastrapasqua & Associates are referred to individually as a "Sub-Advisor,"
collectively as the "Sub-Advisors."
(UTILITY FUND AND EQUITY FUND) - NEW SUB-ADVISORY AGREEMENTS WITH FORT
WASHINGTON INVESTMENT ADVISORS, INC.
THE NEW SUB-ADVISORY AGREEMENTS. Under the terms of each New Sub-Advisory
Agreement, Fort Washington Investment Advisors manages the investment and
reinvestment of the assets of the Funds and places orders for the execution of
all portfolio transactions of the Funds, subject to the control and direction of
the Board of Trustees and Touchstone Advisors. Fort Washington Investment
Advisors receives a fee equal to 0.45% of each Fund's average daily net assets.
<PAGE>
Touchstone Advisors, not the Funds, will pay for the services provided
by Fort Washington Investment Advisors. Fort Washington Investment Advisors will
pay its expenses of providing services to the Funds except for those expenses
which are undertaken by Touchstone Advisors or the Trust.
INFORMATION CONCERNING FORT WASHINGTON INVESTMENT ADVISORS
- ----------------------------------------------------------
Fort Washington Investment Advisors, located at 420 East Fourth Street,
Cincinnati, Ohio 45202, is a wholly-owned subsidiary of The Western and Southern
Life Insurance Company, located at 400 Broadway, Cincinnati, Ohio 45202.
The table below gives the name, address and principal occupation of
each current director and principal executive officer of Fort Washington
Investment Advisors.
<TABLE>
<S> <C> <C>
Name and Address Position with Fort Washington Principal Occupation
- -------------------------------------- ---------------------------------- --------------------------------------------
William J. Williams Chairman and Director Chairman of the Board of The Western and
400 Broadway Southern Life Insurance Company
Cincinnati, OH 45202
William Francis Ledwin President and Director President and Director of Touchstone
420 East Fourth Street Advisors
Cincinnati, OH 45202 Director of Countrywide Investments
Vice President and Chief Investment
Officer of Columbus Life Insurance Company
Senior Vice President and Chief Investment
Officer of The Western and Southern Life
Insurance Company
James J. Vance Vice President and Treasurer Vice President and Treasurer of The
400 Broadway Western and Southern Life Insurance Company
Cincinnati, OH 45202
</TABLE>
Fort Washington Investment Advisors serves as sub-advisor to the
Touchstone funds listed in Exhibit D, each of which is a series of a registered
investment company. The funds listed in Exhibit D have investment objectives
similar to those of the Funds. Exhibit D also includes information about the net
assets, advisory fee and sub-advisory fee of each of these funds.
(GROWTH/VALUE FUND AND AGGRESSIVE GROWTH FUND) - NEW SUB-ADVISORY AGREEMENTS
WITH MASTRAPASQUA & ASSOCIATES, INC.
THE PRESENT SUB-ADVISORY AGREEMENTS. Mastrapasqua & Associates currently
provides investment advisory services to each of the Growth/Value Fund and the
Aggressive Growth Fund pursuant to a sub-advisory agreement among Mastrapasqua &
Associates, the Trust and Countrywide Investments (the "Present Sub-Advisory
Agreements"). The Present Sub-Advisory Agreements for the Growth/Value Fund and
the Aggressive Growth Fund are substantially identical to each other in all
material respects. The Present Sub-Advisory Agreements require Mastrapasqua &
Associates to select portfolio securities for investment by the Funds, purchase
and sell securities for the Funds and to place orders for the execution of such
portfolio transactions, subject to the general supervision of the Board of
Trustees and Countrywide Investments. The Present Sub-Advisory Agreements were
<PAGE>
last approved by the Board of Trustees, including a majority of the Independent
Trustees on September 8, 1999. The Present Sub-Advisory Agreements were last
approved by shareholders of the Funds on October 27, 1999 and became effective
on October 29, 1999. The Present Sub-Advisory Agreements were submitted to
shareholders of the Growth/Value Fund and the Aggressive Growth Fund in 1999 in
connection with the acquisition of Countrywide Investments by Fort Washington
Investment Advisors.
During the fiscal year ended March 31, 1999, Countrywide Investments paid fees
of $154,940 and $77,608, respectively, to Mastrapasqua & Associates for serving
as sub-advisor to the Growth/Value Fund and the Aggressive Growth Fund.
THE NEW SUB-ADVISORY AGREEMENTS. Effective on May 1, 2000 and subject to
shareholder approval of a new investment advisory agreement with Touchstone
Advisors, Countrywide Investments will no longer provide investment advisory
services to the Trust and the Present Sub-Advisory Agreements will be
terminated. On the same date, Mastrapasqua & Associates and Touchstone Advisors
will enter into new Sub-Advisory Agreements, on behalf of the Growth/Value Fund
and the Aggressive Growth Fund (the "New Sub-Advisory Agreements"). Mastrapasqua
& Associates will receive from Touchstone Advisors a fee at an annual rate of
0.60% of each Fund's average daily net assets up to $50 million; 0.50% of such
assets from $50 million to $100 million; 0.40% of such assets from $100 million
to $200 million; and 0.35% of such assets in excess of $200 million. These are
the same fees that Mastrapasqua & Associates currently receives under the
Present Sub-Advisory Agreements.
Touchstone Advisors, not the Funds, will pay for the services provided
by Mastrapasqua & Associates. Mastrapasqua & Associates will pay its expenses of
providing services to the Funds except for those expenses which are undertaken
by Touchstone Advisors or the Trust.
The terms and conditions of the New Sub-Advisory Agreements are
substantially identical in all material respects to those of the Present
Sub-Advisory Agreements except for a change in the named parties to the
agreements and a change in the effective date and the termination date.
INFORMATION CONCERNING MASTRAPASQUA & ASSOCIATES, INC. Mastrapasqua & Associates
is located at 814 Church Street, Suite 600, Nashville, Tennessee 37203.
Mastrapasqua & Associates is an independent registered investment advisory firm
founded by Frank Mastrapasqua, Ph.D. and Thomas A. Trantum, CFA. Mastrapasqua &
Associates was founded in 1993 and provides investment advisory services to high
net worth individual clients and institutions.
<PAGE>
The table below gives the name, address and principal occupation of each current
director and principal executive officer of Mastrapasqua & Associates.
Name and Address Position with Principal
Mastrapasqua Occupation
- ------------------------------------- ----------------------------------------
Frank Mastrapasqua Chairman, Chief Same
814 Church Street Executive Officer and
Nashville, TN 37203 Portfolio Manager
Thomas A. Trantum President, Chief Same
814 Church Street Operating Officer and
Nashville, TN 37203 Portfolio Manager
ADDITIONAL INFORMATION ABOUT THE NEW SUB-ADVISORY AGREEMENTS
- ------------------------------------------------------------
If the New Advisory Agreement is approved by shareholders of a Fund and
a New Sub-Advisory Agreement is approved by shareholders of that Fund, the New
Sub-Advisory Agreement for that Fund will become effective on May 1, 2000. Each
New Sub-Advisory Agreement provides that it will continue in effect for two
years and from year to year thereafter, provided that its continuance is
specifically approved (1) by the Board of Trustees or (2) a vote of a majority
(as defined in the Investment Company Act) of the outstanding shares of a Fund.
In either event, continuance of the New Sub-Advisory Agreement must also
approved by a majority of the Independent Trustees, by a vote cast in person at
a meeting called for the purpose of voting on the continuance.
Each New Sub-Advisory Agreement may be terminated at any time upon 60
days' written notice, without payment of any penalty (1) by Touchstone Advisors,
(2) by the Board of Trustees or by a vote of the majority of the outstanding
voting securities of the affected Fund or (3) by the Sub-Advisor. Each New
Sub-Advisory Agreement automatically terminates in the event of its assignment.
The New Sub-Advisory Agreements for the Utility Fund and Equity Fund
provide that Fort Washington Investment Advisors will not be liable for any act
or omission in connection with the services that it provides to a Fund or for
any losses that may be sustained in the purchase, holding or sale of any
security, absent willful misfeasance, bad faith, gross negligence, or reckless
disregard of the obligations or duties of Fort Washington Investment Advisors.
The New Sub-Advisory Agreements for the Growth/Value Fund and the
Aggressive Growth Fund provide that Mastrapasqua & Associates will not be liable
for any error of judgment or mistake of law, or for any loss suffered by a Fund
in connection with the matters to which the Agreements relate, absent willful
misfeasance, bad faith, gross negligence or reckless disregard of the
obligations or duties of Mastrapasqua & Associates. The Present Sub-Advisory
Agreements contain provisions that are identical to those in the New
Sub-Advisory Agreements for the Growth/Value Fund and the Aggressive Growth
Fund.
<PAGE>
The form of the New Sub-Advisory Agreements for the Utility Fund and
the Equity Fund is attached as Exhibit B. The form of the New Sub-Advisory
Agreements for the Growth/Value Fund and the Aggressive Growth Fund is attached
as Exhibit C. You should read the agreements. The description in this Proxy
Statement of the New Sub-Advisory Agreements is only a summary.
If a New Sub-Advisory Agreement is not approved by shareholders of the
Utility Fund or the Equity Fund, Countrywide Investments will continue to serve
as the investment advisor to that Fund pursuant to the terms of the applicable
Present Advisory Agreement and the Fund will not have a sub-advisor. If a New
Sub-Advisory Agreement is not approved by shareholders of the Growth/Value Fund
or the Aggressive Growth Fund, Mastrapasqua & Associates will continue to serve
as the sub-advisor to the Fund pursuant to the terms of the Present Sub-Advisory
Agreement. If a New Sub-Advisory Agreement is approved by shareholders of a Fund
but the New Advisory Agreement is not approved by the shareholders of that Fund,
Countrywide Investments will continue to serve as the investment advisor to that
Fund pursuant to the terms of the applicable Present Advisory Agreement.
PROPOSALS 1 AND 2
EVALUATION BY THE BOARD OF TRUSTEES
On February 15, 2000, the Board of Trustees, including all of the
Independent Trustees, by a vote cast in person, unanimously approved the New
Advisory Agreement and the New Sub-Advisory Agreements, subject to the required
shareholder approval described in this Proxy Statement.
In determining to recommend approval of the New Advisory Agreement and
the New Sub-Advisory Agreements to shareholders of the Trust, the Independent
Trustees separately and the entire Board of Trustees considered the following
information:
o information about the operations of Touchstone Advisors and Fort
Washington Investment Advisors, including information regarding
the performance of the Touchstone funds managed by Touchstone
Advisors and Fort Washington Investment Advisors;
o information about the operations of Mastrapasqua & Associates,
including information regarding the performance of the Countrywide
funds managed by Mastrapasqua & Associates; and
o information about the background and experience of the investment
advisory personnel of the Sub-Advisors and the nature and quality
of services expected to be rendered to the Trust by Touchstone
Advisors and the Sub-Advisors.
<PAGE>
The Board of Trustees further considered that the fees to be paid by
the Funds under the New Advisory Agreement will be the same as those under the
Present Advisory Agreements, and that the terms of the New Advisory Agreement
are similar to the terms of the Present Advisory Agreements.
In making its determination, the Board considered management's
representations that the employees of Countrywide Investments who are currently
responsible for the daily management of the Utility Fund and the Equity Fund
will continue to manage the Funds in their capacity as employees of Fort
Washington Investment Advisors, thereby providing continuity of management to
shareholders of the Funds. The Trustees further considered that the retention of
Mastrapasqua & Associates as Sub-Advisor for the Growth/Value Fund and the
Aggressive Growth Fund will afford shareholders of those Funds continuity of
investment management.
The Board also considered that the Utility Fund and the Equity Fund may
benefit from an additional layer of professional management expertise through
the employment of both an investment advisor and a sub-advisor, at no extra cost
to the Funds. The Trustees determined that the retention of Touchstone Advisors
and the Sub-Advisors to provide advisory and sub-advisory services to the Funds
will not materially affect the level or quality of investment advisory services
currently provided to the Funds.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS APPROVE THE NEW
ADVISORY AGREEMENT AND THE NEW SUB-ADVISORY AGREEMENTS.
PROPOSAL 3
CHANGE IN INDEPENDENT ACCOUNTANTS
On February 15, 2000, the Board of Trustees, including a majority of
the Independent Trustees, voted to recommend a change in the Trust's independent
public accountants for the fiscal year ending March 31, 2000. Due to the timing
of this recommended change, specific provisions of the Investment Company Act of
1940 will apply. These provisions require that the shareholders first terminate
the employment of Arthur Andersen LLP as the Trust's independent public
accountants and then select Ernst & Young LLP to serve as independent public
accountants.
The change in independent accountants was recommended by Trust's Audit
Committee. In reaching its decision, the Audit Committee considered (1) the
reputation and experience of Ernst & Young, (2) the fees proposed to be charged
by Ernst & Young, (3) the scope and quality of services expected to be provided
to the Trust by Ernst & Young and (4) the ongoing relationship between Ernst &
Young and The Western-Southern Enterprise. The employment of Ernst & Young will
be conditioned upon the right of the Trust, by a vote of a majority of its
outstanding shares, to terminate the employment without any penalties.
Arthur Andersen has acted as the Trust's independent public accountants
from 1983 through its most recently completed fiscal year. During the Trust's
two most recent fiscal years or any subsequent period before Arthur Andersen's
termination, there were no disagreements on any matter of accounting principles
or practices, financial statement disclosure, or auditing scope or procedure
which would have caused Arthur Andersen to make a reference to the subject
matter or the disagreements in connection with its reports.
<PAGE>
If this proposal is not approved by the shareholders, the employment of
Arthur Andersen as the Trust's independent public accountant for the fiscal year
ending March 31, 2000 will continue subject to the right of the shareholders to
terminate their employment.
Representatives of Ernst & Young and Arthur Andersen are not expected
to be present at the meeting although they will have an opportunity to make a
statement, if they desire to do so. If representatives of Ernst & Young or
Arthur Andersen are present, they will be available to respond to appropriate
questions from shareholders.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS APPROVE THE CHANGE
IN THE TRUST'S INDEPENDENT PUBLIC ACCOUNTANTS.
THE PROXY
The Board of Trustees solicits proxies so that each shareholder has the
opportunity to vote on each proposal to be considered at the meeting. A proxy
for voting your shares at the meeting is enclosed. Your proxy, if properly
executed, duly returned and not revoked or if properly voted by phone, will be
voted according to the instructions on the proxy.
A properly executed proxy that has no voting instructions with respect
to a proposal will be voted for that proposal. In addition, proxies will be
voted in the discretion of the proxy holders, in accordance with the
recommendations of the Board of Trustees, if any, on any matter to come before
the meeting that the Trust did not have notice of a reasonable time before the
mailing of this Proxy Statement.
You may revoke your proxy at any time before it is exercised by (1)
filing a written notification of revocation with the Secretary of the Trust, (2)
submitting a proxy bearing a later date, or (3) attending and voting at the
meeting.
For your convenience, you can vote your proxy (1) by dating, signing
and mailing back the enclosed proxy, or (2) by calling and voting by telephone.
Your proxy contains specific instructions on how to vote by telephone.
COST OF SOLICITATION
The Trust has retained Management Information Services Corp. ("MIS") to
solicit proxies for the special meeting. MIS is responsible for printing proxy
cards, mailing proxy material to shareholders, soliciting brokers, custodians,
nominees and fiduciaries, tabulating the returned proxies and performing other
proxy solicitation services. The anticipated cost of these services is
approximately $10,900, and will be paid by Touchstone Advisors.
<PAGE>
As necessary, the Trust will engage D.F. King & Co., Inc. to assist
with proxy solicitation on a Fund by Fund basis at a projected fee of $3,000 per
Fund plus reasonable expenses. The cost of these services will be paid by
Touchstone Advisors.
Touchstone Advisors will also pay the printing and postage costs of the
solicitation. Touchstone Advisors will reimburse MIS, D.F. King, brokers,
custodians, nominees and fiduciaries for the reasonable expenses incurred by
them in connection with forwarding solicitation material to the beneficial
owners of shares held of record by these persons.
In addition to solicitation through the mails, proxies may be solicited
by officers, employees and agents of the Trust without cost to the Funds. This
solicitation may be by telephone, facsimile or otherwise.
OUTSTANDING SHARES AND VOTING REQUIREMENTS
RECORD DATE
- -----------
The Board of Trustees has fixed the close of business on February 28,
2000 as the record date for determining the shareholders entitled to notice of
and to vote at the special meeting of shareholders or any adjournment thereof.
The Trust is composed of 4 separate funds, the Utility Fund, the Equity Fund,
the Growth/Value Fund and the Aggressive Growth Fund (individually a "Fund" and
collectively, the "Funds"), each of which is represented by a separate series of
the Trust's shares. Each Fund, except the Aggressive Growth Fund, offers two
classes of shares, Class A and Class C shares.
As of the record date there were 8,618,101.730 shares of beneficial
interest, no par value, of the Trust outstanding, comprised of shares of each
Fund as follows:
Name of Fund Number of Shares Outstanding
--------------------------------------------- --------------------------------
Utility Fund 2,382,703.668
Equity Fund 2,742,606.551
Growth/Value Fund 2,406,958.667
Aggressive Growth Fund 1,085,832.844
All full shares of the Trust are entitled to one vote, with
proportionate voting for fractional shares.
<PAGE>
QUORUM AND VOTING
- -----------------
PROPOSALS 1 AND 2. Each Fund will vote separately on Proposal 1 and on
Proposal 2. If a quorum (more than 50% of the outstanding shares of a Fund) is
represented at the meeting, the vote of a majority of the outstanding shares of
the Fund is required for approval of the New Advisory Agreement with Touchstone
Advisors and the New Sub-Advisory Agreement with the applicable Sub-Advisor. The
vote of a majority of the outstanding shares means the vote of the lesser of (1)
67% or more of the shares present or represented by proxy at the meeting, if the
holders of more than 50% of the outstanding shares are present or represented by
proxy, or (2) more than 50% of the outstanding shares.
PROPOSAL 3. The Funds will vote together on Proposal 3. The vote of a
simple majority of the shares voted is required for the termination of the
Trust's current independent public accountants and the selection of Ernst &
Young as the Trust's independent public accountants.
If the meeting is called to order but a quorum is not represented at
the meeting, the persons named as proxies may vote the proxies that have been
received to adjourn the meeting to a later date. If a quorum is present at the
meeting but sufficient votes to approve the proposals described in this Proxy
Statement are not received, the persons named as proxies may propose one or more
adjournments of the meeting to permit additional solicitation of proxies. Any
such adjournment will require the affirmative vote of a majority of those shares
represented at the meeting in person or by proxy. The proxy holders will vote
those proxies received that voted in favor of the proposal in favor of such an
adjournment and will vote those proxies received that voted against the proposal
against any such adjournment. A shareholder vote may be taken on one or more of
the proposals in this Proxy Statement before any such adjournment if sufficient
votes have been received and it is otherwise appropriate.
Abstentions and "broker non-votes" are counted for purposes of
determining whether a quorum is present but do not represent votes cast with
respect to a proposal. "Broker non-votes" are shares held by a broker or nominee
for which an executed proxy is received by the Trust, but are not voted as to
one or more proposals because instructions have not been received from the
beneficial owners or persons entitled to vote and the broker or nominee does not
have discretionary voting power. Accordingly, "broker non-votes" and abstentions
on Proposal 1 or Proposal 2 effectively will be a vote against the applicable
proposal.
The Trustees of the Trust intend to vote all of their shares in favor
of the proposals described in this Proxy Statement.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
- -----------------------------------------------
On February 28, 2000, the following persons owned 5% or more of the
outstanding shares of the Trust or a Fund.
<PAGE>
<TABLE>
<S> <C> <C> <C>
Amount Owned of Percentage of
Name of Fund Name and Address of Record Owner Record Outstanding Shares
- ---------------------------- ------------------------------------------------ --------------------------- -------------------------
Utility Fund Merrill Lynch, Pierce, 169,662.556 7.12%
Fenner & Smith Incorporated
For the Sole Benefit of its Customers
4800 Deer Lake Drive East
Jacksonville, FL 32246
Equity Fund Citizens Business Bank, Trustee 834,782.926 30.44%
FBO Countrywide Credit Industries, Inc.
Defined Benefit Pension Plan
225 E. Colorado Boulevard
Pasadena, CA 91102
Growth/Value Fund Charles Schwab & Co., Inc. 579,337.115 24.07%
Mutual Funds Special Custody Account for the
Exclusive Benefit of its Customers
101 Montgomery Street
San Francisco, CA 94104
Scudder Trust Company
FBO Countrywide Credit Industries, Inc. 165,207.471 6.86%
Tax Deferred Savings & Supplemental Investment
Plan Trust
P.O. Box 910208
San Diego, CA 92121
Amalgamated Bank of New York
TWU-NYC Private Business Pension Fund 280,438.423 11.65%
Amivest Corp DIM
P.O. Box 370
New York, NY 10003
Band & Co.
c/o Firstar Bank 210,361.076 8.74%
P.O. Box 1787
Milwaukee, WI 53201
<PAGE>
Aggressive Growth Fund Charles Schwab & Co., Inc. 256,916.817 23.71%
Mutual Funds Special Custody Account for
the Exclusive Benefit of its Customers
101 Montgomery Street
San Francisco, CA 94104
Scudder Trust Company
FBO Countrywide Credit Industries, Inc-Tax
Deferred Savings & Supplemental Investment 206,147.050 19.02%
Plan Trust
P.O. Box 910208
San Diego, CA 92121
Amalgamated Bank of New York
Custodian for TWU-NYC
Private BL Plans Fund
Amivest Corp. DIM
P.O. Box 370 255,070.349 23.54%
New York, NY 10003
Band & Co.
c/o Firstar East
P.O. Box 1787 57,642.722 5.32%
Milwaukee, WI 53201
</TABLE>
No other person owned of record and, according to information available
to the Trust, no other person owned beneficially, 5% of more of the outstanding
shares of the Trust (or any Fund) on the record date.
On February 28, 2000, Oscar P. Robertson, a Trustee of the Trust, owned
17,829.92 shares of the Equity Fund, which represents less than 1% of the
outstanding shares of the Fund. No other Trustee or executive officer of the
Trust owned beneficially any of the outstanding shares of the Trust (or any
Fund) on the record date.
INFORMATION CONCERNING THE TRUST'S OTHER SERVICE PROVIDERS
TRANSFER, ACCOUNTING AND ADMINISTRATIVE AGENT
- ----------------------------------------------
Countrywide Fund Services, Inc. provides transfer agency, shareholder
servicing and accounting and pricing services to the Funds. The address of
Countrywide Fund Services is 312 Walnut Street, 21st Floor, Cincinnati, Ohio
45202. Countrywide Fund Services is an affiliate of Countrywide Investments,
Touchstone Advisors and Fort Washington Investment Advisors.
<PAGE>
During the fiscal year ended March 31, 1999, it received fees from the
Funds for its services as transfer and shareholder servicing agent and
accounting and pricing services agent as follows:
<TABLE>
<S> <C> <C>
As Transfer and Shareholder As Accounting and Pricing
Servicing Agent Services Agent
- ----------------------------------------------- -------------------------------------- -------------------------------
Utility Fund $45,695 $36,000
Equity Fund $36,679 $39,000
Growth/Value Fund $12,491 $24,000
Aggressive Growth Fund $12,250 $24,000
</TABLE>
Countrywide Fund Services will continue to provide transfer agent,
shareholder servicing and accounting and pricing services to the Trust at the
same rates as are currently in effect after the consolidation of the Touchstone
and Countrywide mutual fund complexes.
Countrywide Fund Services also provides administrative services to the
Funds. In this capacity, Countrywide Fund Services supplies executive,
administrative and regulatory services, supervises the preparation of tax
returns, and coordinates the preparation of reports to shareholders and reports
to and filings with the Securities and Exchange Commission and state securities
authorities. Countrywide Investments (not the Funds) pays Countrywide Fund
Services a fee of $37,500 per month for these services, which is allocated among
the Trust, Countrywide Investment Trust and Countrywide Tax-Free Trust based
upon the level of assets. If the New Advisory Agreement and New Sub-Advisory
Agreements are approved, Touchstone Advisors (not the Funds) will pay
Countrywide Fund Services for these services.
PRINCIPAL UNDERWRITER
- ---------------------
Countrywide Investments, 312 Walnut Street 21st Floor, Cincinnati, Ohio
45202, currently serves as the Trust's principal underwriter. During the fiscal
year ended March 31, 1999, the Trust paid Countrywide Investments $8,323 in
underwriting commissions.
After the consolidation of the Touchstone and Countrywide mutual fund
complexes, Touchstone Securities, Inc., 311 Pike Street, Cincinnati, Ohio 45202,
will serve as the Trust's principal underwriter. Touchstone Securities is an
indirect wholly-owned subsidiary of The Western and Southern Life Insurance
Company.
SHAREHOLDER PROPOSALS
The Trust has not received any shareholder proposals to be considered
for presentation at the meeting. Under the proxy rules of the Securities and
Exchange Commission, shareholder proposals may under certain conditions be
included in the Trust's proxy statement and proxy for a particular meeting.
Under these rules, proposals submitted for inclusion in the Trust's proxy
material must be received by the Trust a reasonable time before the solicitation
is made. The fact that the Trust receives a shareholder proposal in a timely
manner does not insure its inclusion in its proxy material because there are
other requirements in the proxy rules relating to such inclusion. You should be
aware that the Trust generally does not hold annual meetings of shareholders.
<PAGE>
OTHER BUSINESS
The proxy holders have no present intention of bringing any matter
before the meeting other than those specifically referred to in the Proxy
Statement or matters in connection with or for the purpose of effecting the
same. Neither the proxy holders nor the Board of Trustees are aware of any
matters that may be presented by others. If any other business properly comes
before the meeting, the proxy holders intend to vote on the other business in
accordance with their best judgment.
By Order of the Board of Trustees,
/s/ Tina D. Hosking
Tina D. Hosking, Secretary
Date: March 14, 2000
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED REPLY ENVELOPE OR VOTE BY PHONE BY FOLLOWING THE INSTRUCTIONS ON THE
ENCLOSED PROXY.
<PAGE>
EXHIBIT A
FORM OF INVESTMENT ADVISORY AGREEMENT
COUNTRYWIDE STRATEGIC TRUST
INVESTMENT ADVISORY AGREEMENT, dated as of ______________, by and
between TOUCHSTONE ADVISORS, INC., an Ohio corporation (the "Advisor"), and
COUNTRYWIDE STRATEGIC TRUST, a Massachusetts business trust created pursuant to
a Declaration of Trust dated November 18, 1982, 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 Advisors 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 sub-advisors for any Fund. Any
agreement between the Advisor and a sub-advisor shall be subject to the renewal,
termination and amendment provisions of paragraph 10 hereof. The Advisor
undertakes to provide the following services and to assume the following
obligations:
<PAGE>
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.
<PAGE>
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; and (x) 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.
<PAGE>
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 the Advisor has
reserved for itself the rights to the name "__________ Strategic 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 shareholder 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 Advisors, Inc. and/or
any of its affiliates and the directors, officers and
employees of Touchstone Advisors, Inc. and/or any of its
affiliates.
<PAGE>
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.
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.
<PAGE>
10. RENEWAL, TERMINATION AND AMENDMENT.
a) This Agreement shall continue in effect, unless sooner
terminated as hereinafter provided, for a period of two
years 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. 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.
<PAGE>
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 November 18,
1982, 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.
COUNTRYWIDE STRATEGIC TRUST
By:__________________________
TOUCHSTONE ADVISORS, INC.
By:___________________________
<PAGE>
SCHEDULE 1
EQUITY FUND
UTILITY FUND
Each Fund pays the Advisor a fee equal to the annual rate of 0.75% on the first
$200 million of average daily net assets; 0.70% of the next $300 million of
average daily net assets and 0.50% of such assets in excess of $500 million.
GROWTH/VALUE FUND
AGGRESSIVE GROWTH FUND
Each Fund pays the Advisor a fee equal to the annual rate of 1.00% on the first
$50 million of average daily net assets; 0.90% of the next $50 million of
average daily net assets; 0.80% of the next $100 million of average daily net
assets and 0.75% of such assets in excess of $200 million.
<PAGE>
1
EXHIBIT B
FORM OF SUB-ADVISORY AGREEMENT
EQUITY FUND and UTILITY FUND
This SUB-ADVISORY AGREEMENT is made as of ______________, by and
between TOUCHSTONE ADVISORS, INC., an Ohio corporation (the "Advisor"), and Fort
Washington Investment Advisors, Inc., an Ohio corporation (the "Sub-Advisor").
WHEREAS, the Advisor is an investment advisor registered under the
Investment Advisors Act of 1940, as amended, and has been retained by
Countrywide Strategic Trust (the "Trust"), a Massachusetts business trust
organized pursuant to a Declaration of Trust dated November 18, 1982 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 ___________ Fund (the "Fund"); and
WHEREAS, the Sub-Advisor also is an investment advisor registered under
the Investment Advisors 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 Advisors 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.
<PAGE>
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 and to the Advisor (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 or the Advisor
shall from time to time request.
b. The Sub-Advisor shall provide support to the Advisor with
respect to the marketing of the Fund, including but not limited to: (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 day-to-day 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, (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
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
<PAGE>
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. Consistent with the Conduct Rules of the
National Association of Securities Dealers, Inc.,and subject to seeking
the most favorable price and execution, the Sub-Advisor may give
consideration to sales of shares of the Fund as a factor in the
selection of brokers and dealers to execute portfolio transactions of
the Fund. 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, and that the Fund derives or will derive a reasonably
significant benefit from such research services. 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.
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. 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.
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 .45% of the
average daily net assets of the Fund. Such fee shall be computed and
<PAGE>
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) (i) the financial condition and
prospects of the Sub-Advisor, (ii) the nature and amount of transactions
affecting the Fund that involve the Sub-Advisor and affiliates of the
Sub-Advisor, (iii) information regarding any potential conflicts of interest
arising by reason of its continuing provision of advisory services to the Fund
and to its other accounts, and (iv) such other information 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. At least
annually, the Sub-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 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.
<PAGE>
6. LIMITATION OF LIABILITY OF THE SUB-ADVISOR. 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 Sub-Advisor and/or any of its affiliates.
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.
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 for a period of two years 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 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.
<PAGE>
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 311 Pike Street, Cincinnati, Ohio 45202 and that the
address of the Sub-Advisor shall be 420 East Fourth Street, Cincinnati, Ohio
45202.
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: __________________________________
Name: Jill T. McGruder
Title: President
FORT WASHINGTON INVESTMENT ADVISORS, INC.
By:__________________________________
Name: William F. Ledwin
Title: President
<PAGE>
EXHIBIT C
FORM OF SUBADVISORY AGREEMENT
GROWTH/VALUE FUND AND AGGRESSIVE GROWTH FUND
Mastrapasqua & Associates, Inc.
814 Church Street
Nashville, TN 37203
Gentlemen:
Countrywide Strategic Trust (the "Trust") is a diversified open-end
management investment company registered under the Investment Company Act of
1940, as amended (the "Act"), and subject to the rules and regulations
promulgated thereunder. The Trust's shares of beneficial interest are divided
into separate series or funds. Each such share of a fund represents an undivided
interest in the assets, subject to the liabilities, allocated to that fund. Each
fund has separate investment objectives and policies. The _________________ Fund
(the "Fund") has been established as a series of the Trust.
Touchstone Advisors, Inc. (the "Manager") acts as the investment
manager for the Fund pursuant to the terms of an Investment Advisory Agreement.
The Manager is responsible for the coordination of investment of the Fund's
assets in portfolio securities. However, specific portfolio purchases and sales
for the investment portfolio of the Fund are to be made by advisory
organizations recommended by the Manager and approved by the Board of Trustees
of the Trust.
1. APPOINTMENT AS AN ADVISOR. The Trust being duly authorized hereby
appoints and employs Mastrapasqua & Associates, Inc. (the "Advisor") as the
discretionary portfolio manager of the Fund, on the terms and conditions set
forth herein.
<PAGE>
2. ACCEPTANCE OF APPOINTMENT; STANDARD OF PERFORMANCE. The Advisor
accepts the appointment as the discretionary portfolio manager and agrees to use
its best professional judgment to make timely investment decisions for the Fund
in accordance with the provisions of this Agreement.
3. PORTFOLIO MANAGEMENT SERVICES OF ADVISOR. The Advisor is hereby
employed and authorized to select portfolio securities for investment by the
Fund, to purchase and sell securities of the Fund, and upon making any purchase
or sale decision, to place orders for the execution of such portfolio
transactions in accordance with paragraphs 5 and 6 hereof. In providing
portfolio management services to the Fund, the Advisor shall be subject to such
investment restrictions as are set forth in the Act and the rules thereunder,
the Internal Revenue Code, applicable state securities laws, the supervision and
control of the Board of Trustees of the Trust, such specific instructions as the
Board of Trustees may adopt and communicate to the Advisor, the investment
objectives, policies and restrictions of the Fund furnished pursuant to
paragraph 4, the provisions of Schedule A hereto and instructions from the
Manager. The Advisor is not authorized by the Fund to take any action, including
the purchase or sale of securities for the Fund, in contravention of any
restriction, limitation, objective, policy or instruction described in the
previous sentence. The Advisor shall maintain on behalf of the Fund the records
listed in Schedule A hereto (as amended from time to time). At the Trust's
reasonable request, the Advisor will consult with the Manager with respect to
any decision made by it with respect to the investments of the Fund.
4. INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS. The Trust will
provide the Advisor with the statement of investment objectives, policies and
restrictions applicable to the Fund as contained in the Trust's registration
statement under the Act and the Securities Act of 1933, and any instructions
<PAGE>
adopted by the Board of Trustees supplemental thereto. The Trust will provide
the Advisor with such further information concerning the investment objectives,
policies and restrictions applicable thereto as the Advisor may from time to
time reasonably request. The Trust retains the right, on written notice to the
Advisor from the Trust or the Manager, to modify any such objectives, policies
or restrictions in any manner at any time.
5. TRANSACTION PROCEDURES. All transactions will be consummated by
payment to or delivery by the Custodian, or such depositories or agents as may
be designated by the Custodian in writing, as custodian for the Fund, of all
cash and/or securities due to or from the Fund, and the Advisor shall not have
possession or custody thereof. If the Manager has authorized the Advisor to
place orders for portfolio transactions of the Fund, the Advisor shall advise
the Custodian and confirm in writing to the Trust and to the Manager all
investment orders for the Fund placed by it with brokers and dealers. The
Advisor shall issue to the Custodian such instructions as may be appropriate in
connection with the settlement of any transaction initiated by the Advisor. It
shall be the responsibility of the Advisor to take appropriate action if the
Custodian fails to confirm in writing proper execution of the instructions.
6. ALLOCATION OF BROKERAGE. When so authorized by the Manager, the
Advisor shall have the authority and discretion to select brokers and dealers to
execute portfolio transactions initiated by the Advisor, and for the selection
of the markets on or in which the transactions will be executed.
A. In doing so, the Advisor will give primary consideration to
securing the best qualitative execution, taking into account such factors as
price (including the applicable brokerage commission or dealer spread), the
execution capability, financial responsibility and responsiveness of the broker
<PAGE>
or dealer and the brokerage and research services provided by the broker or
dealer. Consistent with this policy, the Advisor may select brokers or dealers
who also provide brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934) to the other accounts over
which it exercises investment discretion. It is understood that neither the
Trust, the Manager nor the Advisor have adopted a formula for allocation of the
Fund's investment transaction business. It is also understood that it is
desirable for the Fund that the Manager and/or the Advisor have access to
supplemental investment and market research and security and economic analyses
provided by certain brokers who may execute brokerage transactions at a higher
commission to the Fund than may result when allocating brokerage to other
brokers on the basis of seeking the lowest commission. Therefore, if so
authorized by the Manager, the Advisor is authorized to place orders for the
purchase and sale of securities for the Fund with such certain brokers, subject
to review by the Trust's Board of Trustees from time to time with respect to the
extent and continuation of this practice, provided that the Manager determines
in good faith that the amount of the commission is reasonable in relation to the
value of the brokerage and research services provided by the executing broker or
dealer. The determination may be viewed in terms of either a particular
transaction or the Manager's overall responsibilities with respect to the Fund
and to the other accounts over which it exercises investment discretion. It is
understood that although the information may be useful to the Trust, the Manager
and the Advisor, it is not possible to place a dollar value on such information.
Consistent with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc., and subject to seeking best qualitative execution, the
Manager may give consideration to sales of shares of the Fund as a factor in the
selection of brokers and dealers to execute portfolio transactions of the Fund.
<PAGE>
On occasions when the Advisor deems the purchase or sale of a security
to be in the best interest of the Fund as well as other clients, the Advisor, if
so authorized by the Manager and to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the securities
to be sold or purchased in order to obtain the most favorable price or lower
brokerage commissions and efficient execution. In such event, allocation of the
securities so purchased or sold, as well as expenses incurred in the
transaction, will be made by the Advisor in the manner it considers to be the
most equitable and consistent with its fiduciary obligations to the Fund with
respect to the Fund and to such other clients.
For each fiscal quarter of the Fund, the Advisor shall prepare and
render reports to the Manager and the Trust's Board of Trustees of the total
brokerage business placed by the Advisor and the manner in which the allocation
has been accomplished. Such reports shall set forth at a minimum the information
required to be maintained by Rule 31a-1(b)(9) under the Act.
B. Advisor agrees that it will not execute any portfolio
transactions for the Fund's account with a broker or dealer which is an
"affiliated person" (as defined in the Act) of the Trust, the Manager or the
Advisor without the prior approval of the Manager. The Manager agrees that it
will provide the Advisor with a list of brokers and dealers which are
"affiliated persons" of the Trust, the Manager or the Advisor.
7. PROXIES. The Trust will vote all proxies solicited by or with
respect to the issuers of securities in which assets of the Fund may be invested
from time to time. At the Fund's request, the Advisor shall provide the Trust
with its recommendations as to the voting of such proxies.
<PAGE>
8. REPORTS TO THE ADVISOR. The Trust will provide the Advisor with such
periodic reports concerning the status of the Fund as the Advisor may reasonably
request.
9. FEES FOR SERVICES. For the services provided to the Fund, the
Manager shall pay the Advisor a fee equal to the annual rate of 60/100 of 1% of
the average value of the daily net assets of the Fund up to and including
$50,000,000, 50/100 of 1% of the next $50 million of such assets, 40/100 of 1%
of the next $100 million of such assets, and 35/100 of 1% of such assets in
excess of $200,000,000.
The Advisor's fees shall be payable monthly within ten days following
the end of each month. Pursuant to the provisions of the Investment Advisory
Agreement between the Trust and the Manager, the Manager is solely responsible
for the payment of fees to the Advisor, and the
Trust shall not be obligated to the Advisor with respect to its compensation.
10. OTHER INVESTMENT ACTIVITIES OF THE ADVISOR. The Trust acknowledges
that the Advisor or one or more of its affiliates may have investment
responsibilities or render investment advice to or perform other investment
advisory services for other individuals or entities and that the Advisor, its
affiliates or any of its or their directors, officers, agents or employees may
buy, sell or trade in any securities for its or their respective accounts
("Affiliated Accounts"). Subject to the provisions of paragraph 2 hereof, the
Trust agrees that the Advisor or its affiliates may give advice or exercise
investment responsibility and take such other action with respect to other
Affiliated Accounts which may differ from the advice given or the timing or
nature of action taken with respect to the Fund, provided that the Advisor acts
in good faith, and provided further, that it is the Advisor's policy to
allocate, within its reasonable discretion, investment opportunities to the Fund
over a period of time on a fair and equitable basis relative to the Affiliated
Accounts, taking into account the investment objectives and policies of the Fund
and any specific investment restrictions applicable thereto. The Trust
<PAGE>
acknowledges that one or more of the Affiliated Accounts may at any time hold,
acquire, increase, decrease, dispose of or otherwise deal with positions in
investments in which the Fund may have an interest from time to time, whether in
transactions which involve the Fund or otherwise. The Advisor shall have no
obligation to acquire for the Fund a position in any investment which any
Affiliated Account may acquire, and the Trust shall have no first refusal,
co-investment or other rights in respect of any such investment, either for the
Fund or otherwise.
11. CERTIFICATE OF AUTHORITY. The Trust, the Manager and the Advisor
shall furnish to each other from time to time certified copies of the
resolutions of their Board of Trustees or Board of Directors or executive
committees, as the case may be, evidencing the authority of officers and
employees who are authorized to act on behalf of the Trust, the Fund, the
Manager and/or the Advisor.
12. LIMITATION OF LIABILITY. The Advisor (including its directors,
officers, shareholders, employees, control persons and affiliates of any
thereof) shall not be liable for any error of judgment or mistake of law or for
any loss suffered by the Fund in connection with the matters to which this
Agreement relates, except a loss resulting from willful misfeasance, bad faith
or gross negligence on the part of the Advisor in the performance of its duties
or from the reckless disregard by the Advisor of its obligations and duties
under this Agreement ("disabling conduct"). However, the Advisor will not be
indemnified for any liability unless (1) a final decision is made on the merits
by a court or other body before whom the proceeding was brought that the Advisor
was not liable by reason of disabling conduct, or (2) in the absence of such a
decision, a reasonable determination is made, based upon a review of the facts,
that the Advisor was not liable by reason of disabling conduct, by (a) the vote
of a majority of a quorum of trustees who are neither "interested persons" of
the Trust as defined in the Act nor parties to the proceeding ("disinterested,
non-party trustees"), or (b) an independent legal counsel in a written opinion.
<PAGE>
The Fund will advance attorneys' fees or other expenses incurred by the Advisor
in defending a proceeding, upon the undertaking by or on behalf of the Advisor
to repay the advance unless it is ultimately determined that the Advisor is
entitled to indemnification, so long as the Advisor meets at least one of the
following as a condition to the advance: (1) the Advisor shall provide a
security for its undertaking, (2) the Fund shall be insured against losses
arising by reason of any lawful advances, or (3) a majority of a quorum of the
disinterested, non-party trustees of the Trust, or an independent legal counsel
in a written opinion, shall determine, based on a review of readily available
facts (as opposed to a full trial-type inquiry), that there is reason to believe
that the Advisor ultimately will be found entitled to indemnification. Any
person employed by the Advisor who may also be or become an employee of the
Trust shall be deemed, when acting within the scope of his employment by the
Trust, to be acting in such employment solely for the Trust and not as the
Advisor's employee or agent.
13. CONFIDENTIALITY. Subject to the duty of the Advisor and the Trust
to comply with applicable law, including any demand of any regulatory or taxing
authority having jurisdiction, the parties hereto shall treat as confidential
all information pertaining to the Fund and the actions of the Advisor and the
Trust in respect thereof.
14. ASSIGNMENT. No assignment of this Agreement shall be made by the
Advisor, and this Agreement shall terminate automatically in the event of such
assignment. The Advisor shall notify the Trust in writing sufficiently in
advance of any proposed change of control, as defined in Section 2(a)(9) of the
Act, as will enable the Trust to consider whether an assignment will occur, and
to take the steps necessary to enter into a new contract with the Advisor.
15. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE TRUST. The
Trust represents, warrants and agrees that:
<PAGE>
A. The Advisor has been duly appointed by the Board of Trustees
of the Trust to provide investment services to the Fund as contemplated hereby.
B. The Trust will deliver to the Advisor a true and complete
copy of its then current prospectus and statement of additional information as
effective from time to time and such other documents or instruments governing
the investments of the Fund and such other information as is necessary for the
Advisor to carry out its obligations under this Agreement.
C. The Trust is currently in compliance and shall at all times
comply with the requirements imposed upon the Fund by applicable laws and
regulations.
16. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE ADVISOR. The
Advisor represents, warrants and agrees that:
A. The Advisor is registered as an "investment advisor" under
the Investment Advisors Act of 1940.
B. The Advisor will maintain, keep current and preserve on
behalf of the Fund, in the manner and for the time periods required or
permitted by the Act, the records identified in Schedule A. The Advisor agrees
that such records (unless otherwise indicated on Schedule A) are the property
of the Trust, and will be surrendered to the Trust promptly upon request.
C. The Advisor will complete such reports concerning purchases
or sales of securities on behalf of the Fund as the Manager or the Trust may
from time to time require to ensure compliance with the Act, the Internal
Revenue Code and applicable state securities laws.
D. The Advisor will adopt a written code of ethics complying
with the requirements of Rule 17j-1 under the Act and will provide the Trust
with a copy of the code of ethics and evidence of its adoption. Within
forty-five (45) days of the end of the last calendar quarter of each year while
this Agreement is in effect, the president or a vice president of the Advisor
shall certify to the Trust that the Advisor has complied with the requirements
of Rule 17j-1 during the previous year and that there have been no violations of
the Advisor's code of ethics or, if such a violation has occurred, that
appropriate action was taken in response to such violation. Upon the written
request of the Trust, the Advisor shall submit to the Trust the reports required
to be made to the Advisor by Rule 17j-1(c)(1).
<PAGE>
E. The Advisor will promptly after filing with the Securities
and Exchange Commission an amendment to its Form ADV furnish a copy of such
amendment to the Trust and to the Manager.
F. Upon request of the Trust, the Advisor will provide
assistance to the Custodian in the collection of income due or payable to the
Fund. With respect to income from foreign sources, the Advisor will undertake
any reasonable procedural steps required to reduce, eliminate or reclaim
non-U.S. withholding taxes under the terms of applicable United States income
tax treaties.
G. The Advisor will immediately notify the Trust and the
Manager of the occurrence of any event which would disqualify the Advisor from
serving as an investment advisor of an investment company pursuant to Section
9(a) of the Act or otherwise.
17. AMENDMENT. This Agreement may be amended at any time, but only by
written agreement between the Advisor and the Trust, which amendment, other than
amendments to Schedule A, is subject to the approval of the Board of Trustees
and the shareholders of the Fund in the manner required by the Act and the rules
thereunder, subject to any applicable exemptive order of the Securities and
Exchange Commission modifying the provisions of the Act with respect to approval
of amendments to this Agreement.
<PAGE>
18. EFFECTIVE DATE; TERM. This Agreement shall become effective on the
date of its execution and shall remain in force until _________, 2001 and from
year to year thereafter but only so long as such continuance is specifically
approved at least annually by the vote of a majority of the Trustees who are not
interested persons of the Trust, the Manager or the Advisor, cast in person at a
meeting called for the purpose of voting on such approval, and by a vote of the
Board of Trustees or of a majority of the outstanding voting securities of the
Fund. The aforesaid requirement that this Agreement may be continued "annually"
shall be construed in a manner consistent with the Act and the rules and
regulations thereunder.
19. TERMINATION. This Agreement may be terminated by either party
hereto, without the payment of any penalty, immediately upon written notice to
the other in the event of a breach of any provision thereof by the party so
notified, or otherwise upon sixty (60) days' written notice to the other, but
any such termination shall not affect the status, obligations or liabilities of
any party hereto to the other.
20. SHAREHOLDER LIABILITY. The Advisor is hereby expressly put on
notice of the limitation of shareholder liability as set forth in the
Declaration of Trust of the Trust and agrees that obligations assumed by the
Trust pursuant to this Agreement shall be limited in all cases to the Fund and
its assets. The Advisor agrees that it shall not seek satisfaction of any such
obligations from the shareholders or any individual shareholder of the Fund, nor
from the Trustees or any individual Trustee of the Trust.
21. DEFINITIONS. As used in paragraphs 14 and 18 of this Agreement, the
terms "assignment," interested person" and "vote of a majority of the
outstanding voting securities" shall have the meanings set forth in the Act and
the rules and regulations thereunder.
<PAGE>
22. APPLICABLE LAW. To the extent that state law is not preempted by
the provisions of any law of the United States heretofore or hereafter enacted,
as the same may be amended from time to time, this Agreement shall be
administered, construed and enforced according to the laws of the State of Ohio.
TOUCHSTONE ADVISORS, INC. COUNTRYWIDE STRATEGIC TRUST
By:_______________________________ By:__________________________
Title: President Title: President
Date: __________, 2000 Date: _____________, 2000
ACCEPTANCE
The foregoing Agreement is hereby accepted.
MASTRAPASQUA & ASSOCIATES, INC.
By:______________________________
Title:
Date: _______________, 2000
<PAGE>
SCHEDULE A
RECORDS TO BE MAINTAINED BY THE ADVISOR
----------------------------------------
1. (Rule 31a-1(b)(5) and (6)) A record of each brokerage order, and all
other portfolio purchases and sales, given by the Advisor on behalf of
the Fund for, or in connection with, the purchase or sale of
securities, whether executed or unexecuted. Such records shall include:
A. The name of the broker;
B. The terms and conditions of the order and of any modification
or cancellation thereof;
C. The time of entry or cancellation;
D. The price at which executed;
E. The time of receipt of a report of execution; and
F. The name of the person who placed the order on behalf of the
Fund.
2. (Rule 31a-1(b)(9)) A record for each fiscal quarter, completed within
ten (10) days after the end of the quarter, showing specifically the
basis or bases upon which the allocation of orders for the purchase and
sale of portfolio securities to named brokers or dealers was effected,
and the division of brokerage commissions or other compensation on such
purchase and sale orders. Such record:
A. Shall include the consideration given to:
(i) The sale of shares of the Fund by brokers or dealers.
(ii) The supplying of services or benefits by brokers or
dealers to:
(a) The Trust;
(b) the Manager;
(c) the Advisor;
(d) any other portfolio advisor of the Trust; and
(e) any person affiliated with the foregoing persons.
(iii) Any other consideration other than the technical
qualifications of the brokers and dealers as such.
<PAGE>
B. Shall show the nature of the services or benefits made
available.
C. Shall describe in detail the application of any general or
specific formula or other determinant used in arriving at such
allocation of purchase and sale orders and such division of
brokerage commissions or other compensation.
D. The name of the person responsible for making the
determination of such allocation and such division of
brokerage commissions or other compensation.
3. (Rule 31a-1(b)(10)) A record in the form of an appropriate memorandum
identifying the person or persons, committees or groups authorizing the
purchase or sale of portfolio securities. Where an authorization is
made by a committee or group, a record shall be kept of the names of
its members who participate in the authorization. There shall be
retained as part of this record: any memorandum, recommendation or
instruction supporting or authorizing the purchase or sale of portfolio
securities and such other information as is appropriate to support the
authorization.*
4. (Rule 31a-1(f)) Such accounts, books and other documents as are
required to be maintained by registered investment advisors
by rules adopted under Section 204 of the Investment Advisors Act of
1940, to the extent such records are necessary or appropriate to record
the Advisor's transactions with respect to the Fund.
- -----------------
*Such information might include: the current Form 10-K, annual and
quarterly reports, press releases, reports by analysts and from brokerage firms
(including their recommendation; i.e., buy, sell, hold) or any internal reports
or portfolio advisor reviews.
<PAGE>
EXHIBIT D
The advisory fees and sub-advisory fees in the following table are shown as a
percentage of average daily net assets of the applicable Touchstone Fund. Each
Touchstone Fund pays the applicable advisory fee to Touchstone Advisors.
Touchstone Advisors, not the Touchstone Fund, pays the applicable sub-advisory
fee to Fort Washington Investment Advisors. During the fiscal year ended
December 31, 1999, Touchstone Advisors waived all or a portion of its advisory
fees for each Fund. There is no assurance that any fee waivers will continue in
the future.
<TABLE>
<S> <C> <C> <C>
Net Assets Annual Sub-Advisory Fee Paid
Touchstone Series Trust As of March 1, 2000 Annual Advisory Fee to Fort Washington
- ------------------------------------ ------------------------ -------------------------------------- ------------------------------
Touchstone Emerging Growth Fund 16,811,975 0.80% of average daily net assets Not applicable
Touchstone International Equity 15,297,570 0.95% of average daily net assets Not applicable
Fund
Touchstone Value Plus Fund 29,874,608 0.75% of average daily net assets 0.45% of average daily net
assets
Touchstone Growth & Income Fund 31,748,517 0.80% of average daily net assets up Not applicable
to $150 million
0.75% of average daily net assets
over $150 million
Touchstone Balanced Fund 6,769,062 0.80% of average daily net assets Not applicable
Touchstone Variable Net Assets Annual Sub-Advisory Fee Paid
Series Trust As of March 1, 2000 Annual Advisory Fee to Fort Washington
- ------------------------------------ ------------------------ -------------------------------------- ------------------------------
Touchstone Emerging Growth Fund 41,702,056 0.80% of average daily net assets Not applicable
Touchstone International Equity 39,894,360 0.95% of average daily net assets Not applicable
Fund
Touchstone Value Plus Fund 6,197,652 0.75% of average daily net assets 0.45% of average daily net
assets
Touchstone Growth & Income Fund 55,809,436 0.80% of average daily net assets up Not applicable
to $150 million
0.75% of average daily net assets
over $150 million
Touchstone Balanced Fund 33,462,003 0.80% of average daily net assets Not applicable
Touchstone Enhanced 30 Fund 11,339,970 0.65% of average daily net assets Not applicable
Touchstone Small Cap Value Fund 15,162,306 0.80% of average daily net assets Not applicable
</TABLE>
<PAGE>
TO VOTE BY TELEPHONE:
1. Read the Proxy Statement and have your Proxy Card at hand.
2. Call toll-free 1-888-221-0697
3. Enter the 14-digit Control Number found on your Proxy Card.
4. Follow the simple instructions.
Please fold and detach card at perforation before mailing
PROXY
COUNTRYWIDE STRATEGIC TRUST
SPECIAL MEETING OF SHAREHOLDERS
APRIL 19, 2000
The undersigned shareholder of Countrywide Strategic Trust (the "Trust")
hereby nominates, constitutes and appoints Robert H. Leshner and Maryellen
Peretzky, and each of them, the attorney, agent and proxy of the undersigned,
with full powers of substitution, to vote all the shares of the Trust which the
undersigned is entitled to vote at the Special Meeting of Shareholders of the
Trust to be held in the 21st Floor Board Room, 312 Walnut Street,
Cincinnati, Ohio 45202, on Wednesday, April 19, 2000 at 10:00 a.m. and at any
and all adjournments thereof, as fully and with the same force and effect as the
undersigned might or could do if personally present as set forth herein:
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY PROMPTLY.
DATED: ___________________, 2000
Signature(s) (if held jointly)
(Please date this proxy and sign your name as it
appears at left. Executors, administrators,
trustees, etc. should give their full titles.
All joint owners should sign.)
<PAGE>
Please fold and detach card at perforation before mailing.
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUST'S BOARD OF TRUSTEES, AND MAY BE
REVOKED PRIOR TO ITS EXERCISE BY FILING WITH THE SECRETARY OF THE TRUST A
WRITTEN INSTRUMENT REVOKING THIS PROXY OR A DULY EXECUTED PROXY BEARING A LATER
DATE, OR BY APPEARING IN PERSON AND VOTING AT THE MEETING.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE OF "FOR" ON PROPOSALS 1, 2 AND 3.
THE PROXY SHALL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF
TRUSTEES UNLESS A CONTRARY INSTRUCTION IS INDICATED, IN WHICH CASE THE PROXY
SHALL BE VOTED IN ACCORDANCE WITH SUCH INSTRUCTIONS. ON OTHER MATTERS, IF ANY,
PRESENTED AT THE MEETING, THIS PROXY SHALL BE VOTED IN THE DISCRETION OF THE
PROXY HOLDERS, IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF TRUSTEES,
IF ANY.
PLEASE VOTE BY FILLING IN THE BOXES BELOW.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
1. APPROVAL OF NEW INVESTMENT ADVISORY
AGREEMENT WITH TOUCHSTONE ADVISORS,
INC.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. (UTILITY FUND AND EQUITY FUND ONLY)
APPROVAL OF NEW SUB-ADVISORY
AGREEMENT WITH FORT WASHINGTON
INVESTMENT ADVISORS, INC.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
(GROWTH/VALUE FUND AND AGGRESSIVE
GROWTH FUND ONLY) APPROVAL OF NEW
SUB-ADVISORY AGREEMENT WITH
MASTRAPASQUA & ASSOCIATES, INC.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. TERMINATION OF EMPLOYMENT OF THE
TRUST'S CURRENT INDEPENDENT PUBLIC
ACCOUNTANTS AND SELECTION OF ERNST &
YOUNG LLP AS INDEPENDENT PUBLIC ACCOUNTANTS
FOR THE FISCAL YEAR ENDING MARCH 31, 2000.
PLEASE SIGN AND DATE ON THE REVERSE SIDE.
ARTHUR ANDERSEN
March 14, 2000
Arthur Andersen LLP
Office of Chief Accountant 425 Walnut Street
Securities and Exchange Commission Cincinnati OH 45202-3912
450 Fifth Street, N.W.
Washington, D.C. 20549 Tel 513 381 6900
Dear Sir/Madam:
We have read the third paragraph of Proposal 3 included in the proxy statement
dated March 14, 2000 of Countrywide Strategic Trust to be filed with the
Securities and Exchange Commission and are in agreement with the statements
contained therein.
Very truly yours,
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
CJC
Copy to:
Ms. Tina D. Hosking, Secretary
