<PAGE>
EXHIBIT D.(1).
THE LEGENDS FUND, INC.
MANAGEMENT AGREEMENT
Agreement, made this ___ day of _________, 2000 between The Legends
Fund, Inc., a Maryland corporation (the FUND), and Touchstone Advisors, Inc.,
an Ohio corporation (the MANAGER).
W I T N E S S ET H
WHEREAS, the Fund is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the 1940
ACT); and
WHEREAS, the shares of beneficial interest of the Fund are divided
into separate series or portfolios (each, a PORTFOLIO), each of which is
established pursuant to a resolution of the Board of Directors of the Fund,
and the Board of Directors may from time to time terminate such Portfolios or
establish and terminate additional Portfolios; and
WHEREAS, the Manager is registered as an investment adviser under
the Investment Advisers Act of 1940, as amended (the ADVISERS ACT); and
WHEREAS, the Fund desires to retain the Manager to render or
contract to obtain as hereinafter provided investment advisory
and-supervisory services to the Fund and the Fund also desires to avail
itself of the facilities available from the Manager with respect to the
administration of the Fund's day to day business affairs, and the Manager is
willing to render or contract for such investment advisory, supervisory and
administrative services;
NOW, THEREFORE, the parties agree as follows:
1. APPOINTMENT OF MANAGER. The Fund hereby appoints the Manager
to act as manager of the Fund and administrator of its business
affairs for the period and on the terms set forth in this Agreement.
The Manager accepts such appointment and agrees to render the
services herein described, for the compensation herein provided. The
Manager is authorized to enter into sub-advisory agreements
(SUB-ADVISORY AGREEMENTS) with registered investment advisers (each
a SUB-ADVISER and collectively the SUB-ADVISERS) pursuant to which
the Manager delegates to the Sub-Advisers its obligations for
providing investment advisory and certain other services in
connection with one or more
<PAGE>
of the Portfolios; provided, that the Manager, and not the Fund,
shall be responsible for any compensation payable under the
Sub-Advisory Agreements. Any such Sub-Advisory Agreement may be
entered into by the Manager on such terms and in such manner as may
be permitted by the 1940 Act and the rules thereunder. For each
Portfolio for which the Manager has entered into a Sub-Advisory
Agreement, the Sub-Adviser shall have the primary responsibility for
providing investment advisory services as set forth in Section 2 and
shall be responsible for broker-dealer selection as set forth in
Section 3 and maintaining books and records as set forth in Section
4, and the Manager will have supervisory responsibility for
investment advisory services furnished by the Sub-Adviser pursuant
to the Sub-Advisory Agreement. The Manager will review the
performance of each Sub-Adviser and make recommendations to the
Board of Directors of the Fund with respect to the retention and
renewal of Sub-Advisory Agreements.
2. Investment Advisory Services. Subject to the supervision of the
Fund's Board of Directors, the Manager will provide a continuous
investment program for each Portfolio and determine the composition
of the assets of each Portfolio, including determination of the
purchase, retention or sale of the securities, cash, and other
investments contained in such Portfolio's holdings. The Manager will
provide investment research and conduct a continuous program of
evaluation, investment, sales, and reinvestment of each Portfolio's
assets by determining the securities and other investments that
shall be purchased, entered into, sold, closed, or exchanged for
such Portfolio, when these transactions should be executed, and what
portion of the assets of such Portfolio should be held in the
various securities and other investments in which it may invest, and
the Manager is hereby authorized to execute and perform such
services, or to arrange for execution and performance of such
services, on behalf of each Portfolio. To the extent, if any,
permitted by the investment policies of a Portfolio, the Manager
shall make determinations as to and execute and perform futures
contracts and options on behalf of such Portfolio. The Manager will
provide the services under this Agreement in accordance with each
Portfolio's investment objective or objectives, policies, procedures
and restrictions as stated in the Fund's Registration Statement, as
amended from time to time (the REGISTRATION STATEMENT), filed with
the Securities and Exchange Commission (the SEC) and any other
documents that set forth investment policies, procedures or
restrictions governing the Portfolio.
The Manager further agrees as follows:
(a) The Manager will manage each Portfolio (i) so that it
will qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as
amended (the CODE), and (ii) so as to ensure
compliance by such Portfolio with the diversification
requirements of Section 817(h) of the Code and
regulations issued thereunder. In managing the
Portfolio in accordance with these requirements, the
Manager shall be entitled to receive and act upon
advice of counsel.
<PAGE>
(b) In undertaking its duties under this Agreement, the
Manager will comply with the 1940 Act and all rules
and regulations thereunder, all other applicable
federal and state laws and regulations, with any
applicable procedures adopted by the Fund's Board of
Directors of which it has notice and the provisions
of the Registration Statement.
(c) On occasions when the Manager deems the purchase
or sale of a security to be in the best interest
of a Portfolio as well as of the Manager's or the
Manager's affiliates' other investment advisory
clients, the Manager may, to the extent permitted
by applicable laws and regulations, but shall not
be obligated to, aggregate the securities to be so
sold or purchased with those of its other clients
where such aggregation is not inconsistent with
the policies set forth in the Registration
Statement. In such event, the Manager will
allocate the securities so purchased or sold, as
well as the expenses incurred in the transaction,
in a manner that is fair and equitable in the
Manager's judgment in the exercise of the
Manager's fiduciary obligations to the Fund and to
such other clients.
(d) In connection with the purchase and sale of
securities for each Portfolio, the Manager will
arrange for the transmission to the custodian,
transfer agent, dividend disbursing agent and
recordkeeping agent for the Fund (such custodian
and agent or agents hereinafter referred to as the
AGENT), on a daily basis, such confirmations,
trade tickets (which shall state industry
classifications unless the Manager has previously
furnished a list of classifications for portfolio
securities), and other documents and information,
including, but not limited to, Cusip or other
numbers that identify securities to be purchased
or sold on behalf of each Portfolio and, with
respect to mortgage derivative and asset-backed
securities purchased by the Manager for a
Portfolio, 1066Q reports and supplemental
information as required to be available pursuant
to IRS Publication 938, as may be reasonably
necessary to enable the Agent to perform its
administrative and recordkeeping responsibilities
with respect to such Portfolio. With respect to
portfolio securities to be purchased or sold
through the Depository Trust Company, the Manager
will arrange for the automatic transmission of the
confirmation of such trades to the Fund's Agents.
(e) The Manager will monitor on a daily basis, by
review of daily pricing reports provided by the
Agent to the Manager, the determination by the
Agent for the Fund of the valuation of portfolio
securities and other investments of each
Portfolio. The Manager shall not be obligated to
independently verify the Agent's pricing
determinations, and the Agent's responsibility
<PAGE>
for accurate pricing determinations of the value
of the Portfolio's securities shall not be reduced
by the Manager's duty to monitor such
determinations. The Manager will assist the Agent
in determining or confirming, consistent with the
procedures and policies stated in the Registration
Statement, the value of any portfolio securities
or other assets of each Portfolio for which the
Agent seeks assistance from or identifies for
review by the Manager.
(f) The Manager will make available to the Fund, promptly
upon request, all of each Portfolio's investment
records and ledgers maintained by the Manager as are
necessary to assist the Fund to comply with
requirements of the 1940 Act and the Advisers Act, as
well as other applicable laws. The Manager will
furnish to regulatory authorities having the
requisite authority any information or reports in
connection with its services which may be requested
in order to ascertain whether the operations of the
Fund are being conducted in a manner consistent with
applicable laws and regulations.
(g) The Manager will provide reports, which may be
prepared by the Agent, to the Fund's Board of
Directors for consideration at meetings of the
Board on the investment program for each Portfolio
and the issuers and securities represented in each
Portfolio's securities holdings, including a
schedule of the investments and other assets held
in such Portfolio and a statement of all purchases
and sales for the Portfolio since the last such
statement, and will furnish the Fund's Board of
Directors with periodic and special reports with
respect to the Portfolio as the Directors may
reasonably request, including statistical
information with respect to the Portfolio's
securities.
<PAGE>
3. BROKER-DEALER SELECTION. The Manager is responsible for decisions to
buy or sell securities and other investments for each Portfolio,
broker-dealer and futures commission merchants' selection, and
negotiation of brokerage commission and futures commission
merchants' rates. As a general matter, in executing portfolio
transactions, the Manager may employ or deal with such
broker-dealers or futures commission merchants as may, in the
Manager's best judgment, provide prompt and reliable execution of
the transactions at favorable prices and reasonable commission
rates. In selecting such broker-dealers or futures commission
merchants, the Manager shall consider all relevant factors,
including price (including the applicable brokerage commission,
dealer spread or futures commission merchant rate), the size of the
order, the nature of the market for the security or other
investment, the timing of the transaction, the reputation,
experience and financial stability of the broker-dealer or futures
commission merchant involved, the quality of the service, the
difficulty of execution, and the execution capabilities and
operational
<PAGE>
facilities of the firm involved, and, in the case of securities, the
firm's risk in positioning a block of securities. Subject to such
policies as the Board of Directors may determine and consistent with
Section 28(e) of the Securities Exchange Act of 1934, as amended
(the 1934 ACT), the Manager shall not be deemed to have acted
unlawfully or to have breached any duty created by this Agreement or
otherwise solely by reason of the Manager's having caused a
Portfolio to pay a member of an exchange, broker or dealer an amount
of commission for effecting a securities transaction in excess of
the amount of commission another member of an exchange, broker or
dealer would have charged for effecting that transaction, if the
Manager determines in good faith that such amount of commission was
reasonable in relation to the value of the brokerage and research
services provided by such member of an exchange, broker or dealer
viewed in terms of either that particular transaction or the
Manager's overall responsibilities with respect to such Portfolio
and to the other clients as to which the Manager exercises
investment discretion. In accordance with Section 11(a) of the 1934
Act and Rule lla2-2('I') thereunder, and subject to any other
applicable laws and regulations including Section 17(e) of the 1940
Act and Rule 17e-1 thereunder, the Manager may engage its
affiliates, or any Sub-Adviser to the Fund and its respective
affiliates, as broker-dealers or futures commission merchants to
effect portfolio transactions in securities and other investments
for a Portfolio.
4. BOOKS AND RECORDS. The Manager shall keep the Fund's books and records
required to be maintained by it pursuant to this Agreement, the 1940
Act or otherwise. The Manager agrees that all records which it
maintains for the Fund are the property of the Fund and it will
surrender promptly to the Fund any such records upon the Fund's
request, provided however that the Manager may retain a copy of such
records. The Manager further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records as are
required to be maintained by the Manager hereunder.
5. ADMINISTRATIVE AND SUPERVISORY SERVICES.
(a) The Manager will coordinate all matters relating to the
functions of the Portfolios' Sub-Advisers, Agents,
accountants, attorneys, and other parties performing services
or operational functions for the Portfolios.
(b) The Manager will furnish without cost to the Fund, or pay the
cost of, such office space, office equipment and office
facilities as are adequate for the Fund's needs.
(c) The Manager will provide, without remuneration from or
other cost to the Fund, the services of a sufficient number
of individuals competent to perform all of the Fund's
executive, administrative and clerical functions as are
necessary to ensure compliance with federal securities laws
as well as other applicable laws and to provide effective
supervision and administration of the Portfolios and which
are not performed by employees or other agents engaged by
the Fund or by the Manager acting in some other capacity
pursuant to a separate agreement or
<PAGE>
arrangement with the Fund. The Manager shall authorize and
permit any of its directors, officers and employees who may
be elected as Directors or officers of the Fund to serve in
the capacities in which they are elected without any
remuneration from the Fund.
(d) The Manager will assist in the preparation of all periodic
reports to the shareholders of the Fund and all reports and
filings required to maintain the registration and
qualification of the Fund's shares, or to meet other
regulatory or tax requirements applicable to the Fund, under
federal and state securities and tax laws.
(e) The Manager shall prepare and, after approval by the Fund,
file and arrange for the distribution of proxy materials and
periodic reports to Fund shareholders as required by
applicable law.
(f) The Manager shall prepare, or cause the preparation of, and,
after approval by the Fund, arrange for the filing of such
registration statements and other documents with the SEC and
other federal and state regulatory authorities as may be
required by applicable law.
(g) The Manager shall take such other action with respect to the
Portfolios, after approval by the Fund, as may bc required by
applicable law, including without limitation the rules and
regulations of the SEC and of state securities or insurance
commissions and other regulatory agencies.
(h) The Manager shall make its officers and employees available to
the Board of Directors and officers of the Fund and
Sub-Advisers for consultation and discussions regarding the
supervision and administration of the Portfolios.
6. EXPENSES.
(a) During the term of this Agreement, the Manager shall pay, or
cause a Sub-Adviser to pay, the-following expenses:
(i) The salaries and expenses of all personnel of the
Fund and the Manager except the fees and expenses of
Directors who are not "interested persons" (within
the meaning of the 1940 Act) of the Fund, the
Manager, National Integrity Life Insurance Company
("National Integrity"), or any Sub-Adviser;
(ii) All expenses reasonably incurred by the Manager in
connection with providing the services described
above, including the provision of office space,
office equipment, office facilities, and executive,
administrative and
<PAGE>
clerical personnel in accordance with paragraph
2(i) hereof, but excluding the expenses described
below to be assumed by the Fund;
(iii) The fees of the Sub-Advisers pursuant to the
Sub-Advisory Agreements; and
(iv) The costs and expenses payable by the Sub-Advisers
pursuant to the Sub-Advisory Agreements.
(b) Each Portfolio is responsible for and bears all expenses
incurred in its operation that are not specifically assumed by
the Manager or Integrity Financial Services, Inc., the Fund's
distributor, pursuant to the Distribution Agreement with the
Fund. General expenses of the Fund not readily identifiable as
belonging to one of the Portfolios will be allocated among the
Portfolios by or under the direction of the Fund's Board of
Directors in such manner as the Board shall determine to be
fair and equitable. Expenses borne by each Portfolio include,
but are not limited to, the following (or the Portfolio's
allocated share of the following):
(i) The cost (including brokerage commissions, if any) of
securities purchased or sold by the Portfolio and any
losses incurred in connection therewith;
(ii) Investment management fees due hereunder (but not
sub-advisory fees, which are payable by the Manager);
(iii) Organizational expenses;
(iv) Filing fees and expenses relating to the registration
and qualification of the Fund or the shares of a
Portfolio under federal or state securities laws and
maintenance of such registrations and qualifications;
(v) Fees and expenses payable to the Directors who are
not "interested persons" of the Fund or the Manager,
National Integrity or any Sub-Adviser;
(vi) Taxes (including any income or franchise taxes)
and governmental fees;
(vii) Costs of any liability, directors' and officers',
uncollectible items of deposit and other insurance
and fidelity bonds;
(viii) Legal, accounting and auditing expense;
(ix) Charges of custodians, transfer agents and other
agents;
<PAGE>
(x) Expenses of setting in type and providing a
camera-ready copy of prospectuses and supplements
thereto, expenses of setting in type and printing or
otherwise reproducing statements of additional
information and supplements thereto and reports and
proxy materials for existing shareholders;
(xi) Any extraordinary expenses (including fees and
disbursements of counsel) incurred by the Fund or
Portfolio;
(xii) Fees, voluntary assessments and other expenses
incurred in connection with membership in investment
company organizations; and
(xiii) Costs of meetings of shareholders.
(c) In the event the expenses of the Fund for any fiscal year
(including the fees payable to the Manager but excluding
interest, taxes, brokerage commissions and litigation and
indemnification expenses and other extraordinary expenses
not incurred in the ordinary course of the Fund's business)
exceed the lowest applicable annual expense limitation
established and enforced pursuant to the statute or
regulations of any applicable jurisdictions, the
compensation due the Manager hereunder will be reduced by
the amount of such excess. If such excess amount exceeds
the compensation payable to the Manager hereunder, the
Manager will not be required to make any additional
payments to the Fund in reimbursement of such expenses.
7. COMPENSATION. For the services provided and the expenses assumed
pursuant to this Agreement, each Portfolio will pay to the Manager as
full compensation therefor a fee as set forth below. This fee will be
deducted from the assets of the respective Portfolio and paid to the
Manager monthly, but will be accrued daily for purposes of determining
the value of each Portfolio on each day the New York Stock Exchange is
open for trading. Any reduction in the fee payable pursuant to
paragraph 6(c) shall be made monthly, and will be subject to
readjustment during the year.
<TABLE>
<CAPTION>
ANNUAL PERCENTAGE OF
AVERAGE NET ASSETS PAID BY
NAME OF PORTFOLIO PORTFOLIO TO MANAGER
<S> <C>
Zweig Asset Allocation Portfolio .90%
Harris Bretall Sullivan & Smith Equity Growth Portfolio .65%
Scudder Kemper Value Portfolio .65%
Zweig Equity (Small Cap) Portfolio 1.05%
</TABLE>
<PAGE>
8. LIABILITY. Except as may otherwise be required by the 1940 Act and the
rules and regulations thereunder, the Manager, any of its affiliated
persons and each person, if any, who, within the meaning of Section 15
of the Securities Act of 1933, as amended, controls the Manager, shall
not be liable for, or subject to any damages, expenses, or losses in
connection with, any act or omission connected with or arising out of
any services rendered under this Agreement, except by reason of willful
misfeasance, bad faith or gross negligence on the part of the Manager
in the performance of its duties or from reckless disregard of its
duties and obligations under this Agreement.
9. TERM. Unless sooner terminated, this Agreement shall continue in
effect for two years and thereafter for successive one year periods,
provided that such continuance is specifically approved at least
annually in conformity with the requirements of the 1940 Act;
provided, however, that this Agreement may be terminated by the Fund
or any Portfolio thereof (with respect to such Portfolio) at any
time, without the payment of any penalty, by the Board of Directors
of the Fund or by vote of a majority of the outstanding voting
securities (as defined in the 1940 Act) of a Portfolio, or by the
Manager at any time, without the payment of any penalty, upon not
less than 60 days' prior written notice to the other party. This
Agreement shall terminate automatically in the event of its
assignment (as defined in the 1940 Act).
10. NON-EXCLUSIVITY. Nothing in this Agreement shall limit or restrict the
right of any director, officer or employee of the Manager who may also
be a Director, officer or employee of the Fund to engage in any other
business or to devote his or her time and attention in part to the
management or other aspects of any business, whether of a similar or
dissimilar nature, nor limit or restrict the right of the Manager to
engage in any other business or to render services of any kind to any
other corporation, firm, individual or association.
11. AMENDMENTS. This Agreement may be amended by mutual consent in writing,
but the consent of the Fund must be obtained in conformity with the
requirements of the 1940 Act.
12. NOTICES. Any notice or other communication required to be given
pursuant to this Agreement shall be deemed duly given if delivered or
mailed by registered mail, postage prepaid, (I) to the Manager at 515
West Market Street, 8th Floor, Louisville, KY 40202, Attention:
President; or (2) to the Fund at 515 West Market Street, 8th Floor,
Louisville, KY 40202, Attention: President.
13. CHOICE OF LAW. This Agreement is made and to be principally performed
in the State of New York, and except insofar as the 1940 Act or other
federal laws and regulations may
<PAGE>
be controlling, this Agreement shall be governed by, and construed
and enforced in accordance with, the internal laws of the State of
New York.
14. SEPARATE SERIES. The Fund is a corporation organized under the Maryland
General Corporation Law on July 22, 1992. The Fund is a corporation
with separate series, or Portfolios, and all debts, liabilities,
obligations and expenses of a particular Portfolio shall be enforceable
only against the assets of that Portfolio and not against the assets of
any other Portfolio or of the Fund as a whole.
15. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto and supersedes any prior agreement with
respect to the subject matter hereof whether oral or written.
16. COUNTERPARTS. This Agreement may be executed in counterparts, and each
counterpart shall for all purposes be deemed an original, and all such
counterparts shall together constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
THE LEGENDS FUND, INC.
By
---------------------------------
TOUCHSTONE ADVISORS, INC.
By
---------------------------------
