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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of
the Commission Only
(as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Section 240.14a-11(c)
or Section 240.14a-12
SELECT ADVISORS TRUST A AND SELECT ADVISORS TRUST C
(Name of Registrant/s 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)(4) 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:
- --------------------------------------------------------------------------------
(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):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identity 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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TOUCHSTONE GROWTH & INCOME FUND A
(a series of Select Advisors Trust A)
and
TOUCHSTONE GROWTH & INCOME FUND C
(a series of Select Advisors Trust C)
311 Pike Street
Cincinnati, Ohio 45202
(800) 669-2796
NOTICE OF SPECIAL MEETING
Notice is hereby given that a Special Meeting (the "Meeting") of
Shareholders of Touchstone Growth & Income Fund A ("Fund A"), a separate series
of Select Advisors Trust A ("Trust A" or a "Trust"), and Shareholders of
Touchstone Growth & Income Fund C ("Fund C"), a separate series of Select
Advisors Trust C ("Trust C" or a "Trust"), will be held on September 18, 1997,
at 10:30 a.m., Eastern Time, at the offices of the Trusts, 311 Pike Street,
Cincinnati, Ohio 45202. At the Meeting, Shareholders of Fund A and Shareholders
of Fund C will each be asked to consider and vote upon the following proposals:
1. To approve or disapprove the portfolio advisory agreement, dated as of
September 1, 1997, between Touchstone Advisors, Inc. (the "Advisor")
and Scudder Stevens & Clark Inc. ("Scudder"), pursuant to which
agreement Scudder acts as portfolio advisor (i.e., subadvisor) with
respect to the assets of the Growth & Income Portfolio (the
"Portfolio") of Select Advisors Portfolios, all as described in the
attached Proxy Statement (all of the investable assets of Fund A and
Fund C are invested in the Portfolio).
2. To approve or disapprove a new portfolio advisory agreement between
the Advisor and Scudder (or its successor), to become effective upon
the consummation of the Transactions (as defined in the Proxy
Statement) pursuant to which Scudder will be subject to a change in
control and change its name to Scudder Kemper Investments, Inc., all
as described in the attached Proxy Statement, pursuant to which
agreement the renamed Scudder entity will continue to act as portfolio
advisor with respect to the assets of the Portfolio.
3. To approve or disapprove an amendment to the existing investment
advisory agreement between Select Advisors Portfolios (on behalf of
the Portfolio) and the Advisor, pursuant to which agreement the
Advisor acts as investment advisor to the Portfolio, which would
increase the fee paid by the Portfolio to the Advisor by .05% on the
first $150 million of the Portfolio's average net assets, as described
in this Proxy Statement.
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4. To approve or disapprove an amendment to the Portfolio's fundamental
investment restriction relating to investments in real estate.
Shareholders of record at the close of business on August 15, 1997, are
entitled to notice of, and to vote at, the Meeting. Your attention is called to
the accompanying Proxy Statement. Regardless of whether you plan to attend the
Meeting, PLEASE COMPLETE, SIGN AND RETURN PROMPTLY THE ENCLOSED PROXY CARD so
that your proportionate interest in the Funds may be voted in accordance with
your instructions. If you are present at the Meeting, you may change your vote,
if desired, at that time.
By Order of the Board of Trustees of each Trust.
Andrew S. Josef
Secretary
Cincinnati, Ohio
August 29, 1997
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TOUCHSTONE GROWTH & INCOME FUND A
(a series of Select Advisors Trust A)
and
TOUCHSTONE GROWTH & INCOME FUND C
(a series of Select Advisors Trust C)
311 Pike Street
Cincinnati, Ohio 45202
(800) 669-2796
PROXY STATEMENT
This Proxy Statement is furnished by Select Advisors Trust A ("Trust A" or
a "Trust") to the shareholders of its Touchstone Growth & Income Fund A
(respectively, "Fund A Shareholders" and "Fund A"), and by Select Advisors Trust
C ("Trust C" or a "Trust") to the shareholders of its Touchstone Growth & Income
Fund C (respectively, "Fund C Shareholders" and "Fund C"), on behalf of each
Trust's Board of Trustees. This Proxy Statement is being provided to you in
connection with each Trust's solicitation of the accompanying proxy, to be voted
at a Special Meeting of Shareholders of Fund A and Shareholders of Fund C (the
"Meeting") to be held on September 18, 1997, at 10:30 a.m., Eastern Time, at the
offices of the Trusts, 311 Pike Street, Cincinnati, Ohio 45202, for the purposes
set forth below and in the accompanying Notice of Special Meeting. This Proxy
Statement is being mailed to Fund A Shareholders and Fund C Shareholders
(collectively, the "Shareholders") on or about August 29, 1997.
At the Meeting, Shareholders will be asked to consider and vote upon the
following proposals:
1. To approve or disapprove the portfolio advisory agreement, dated as of
September 1, 1997, between Touchstone Advisors, Inc. (the "Advisor")
and Scudder, Stevens & Clark Inc. ("Scudder"), pursuant to which
agreement Scudder acts as portfolio advisor (i.e., subadvisor) with
respect to the assets of the Growth & Income Portfolio (the
"Portfolio") of Select Advisors Portfolios, all as described in the
attached Proxy Statement (all of the investable assets of Fund A and
Fund C are invested in the Portfolio).
2. To approve or disapprove a new portfolio advisory agreement between
the Advisor and Scudder (or its successor), to become effective upon
the consummation of the Transactions (as defined in the Proxy
Statement) pursuant to which Scudder will be subject to a change in
control and change its name to Scudder Kemper Investments, Inc., all
as described in the attached Proxy Statement, pursuant to which
agreement the renamed Scudder entity will continue to act as portfolio
advisor with respect to the assets of the Portfolio.
3. To approve or disapprove an amendment to the existing investment
advisory agreement between Select Advisors Portfolios (on behalf of
the Portfolio) and
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the Advisor, pursuant to which agreement the Advisor acts as
investment advisor to the Portfolio, which would increase the fee paid
by the Portfolio to the Advisor by .05% on the first $150 million of
the Portfolio's average net assets, as described in this Proxy
Statement
4. To approve or disapprove an amendment to the Portfolio's fundamental
investment restriction relating to investments in real estate.
CERTAIN VOTING MATTERS
Shareholders are being asked to vote on the proposals described in this
Proxy Statement because the Portfolio Trust, on behalf of the Portfolio, has
requested that Portfolio investors vote on such matters. With respect to each
proposal, the entire interest that each Fund holds in the Portfolio will be
voted in direct proportion to the votes cast by Shareholders of that Fund for
and against such proposal at the Meeting. Shares not voted will, therefore, not
affect the outcome at the Portfolio level. Only Shareholders of record at the
close of business on August 15, 1997 (the "Record Date"), will be entitled to
vote at the Meeting. As of the Record Date there were ________ shares of Fund A
outstanding and __________ shares of Fund C outstanding. Each share of a Fund is
entitled to one vote and each fractional share is entitled to a proportionate
share of one vote.
Trust A and Trust C will then vote the securities of the Portfolio held by
Fund A and Fund C, respectively, in accordance with that Fund's Shareholder vote
at the Meeting. The percentage of a Fund's interest in the Portfolio that
represents such Fund's Shareholders not voting at the Meeting will be voted for
or against each proposal in the same proportion as those cast by such Fund's
Shareholders who do vote.
The persons named in the accompanying proxy will vote as directed by the
proxy, but in the absence of voting directions, any proxy that is signed and
returned will be voted FOR the proposals. With respect to any other matters
(none of which are now known to either Trust's Board of Trustees) that may be
presented at the Meeting, all proxies will be voted in the discretion of the
persons appointed as proxies.
A Shareholder may revoke the accompanying proxy at any time prior to its
use by filing with the Secretary of the respective Trust a written revocation or
a duly executed proxy bearing a later date. The proxy will not be voted if the
Shareholder is present at the Meeting AND elects to vote in person. Attendance
at the Meeting will not, by itself, serve to revoke the proxy.
If a Shareholder abstains, the shares represented will be counted as
present and entitled to vote on the matter for purposes of determining a quorum
at the Meeting, but the abstention will have the effect of a negative vote on
the proposals. If a broker indicates on the form of proxy that it does not have
discretionary authority as to certain shares, those shares will be counted as
present at the Meeting for quorum purposes but not entitled to vote with respect
to the proposals and thus will also have the effect of a negative vote on the
proposals.
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As of the Record Date, Western-Southern Life Assurance Company ("WSLAC")
owned __% of the outstanding voting securities of Fund A and __% of the
outstanding voting securities of Fund C and has indicated that it will allow
such shares to be voted in direct proportion to the votes cast by Shareholders
of that Fund for and against each proposal at the Meeting. As of the Record
Date, Fund A owns ____% of the outstanding voting securities of the Portfolio
and Fund C owns ____% of the outstanding voting securities of the Portfolio. In
addition, as of the Record Date, WSLAC owned __% of the outstanding voting
securities of the Portfolio through investments in the Portfolio held by WSLAC's
Separate Account A ("Separate Account A"), which holds and invests the assets of
The Western & Southern Life Insurance Company Pension Plan (the "Pension Plan").
Because WSLAC has determined that the proposals to be voted on at the Meeting
are in the best interests of the participants in the Pension Plan, it intends to
vote such interests in the Portfolio FOR the proposals.
The principal solicitation of proxies will be by mail, but proxies may also
be solicited by telephone, telegraph and personal contact by Trustees, officers
and regular employees of the respective Trust. All costs associated with the
preparation, filing and distribution of this Proxy Statement, the solicitation
and the Meeting will be borne by the Advisor and not by Fund A or Fund C, the
Trusts, the Portfolio or Scudder.
PROPOSAL 1
CURRENT PORTFOLIO SUB-ADVISORY AGREEMENT
BACKGROUND
As discussed in each Trust's Prospectus, each Fund is a Spoke(SM) fund
within a type of two-tier, master/feeder mutual fund structure, referred to as a
Hub and Spoke(R) structure. (1) A fund in a Hub and Spoke structure, unlike
other mutual funds which directly acquire and manage their own portfolio of
securities, seeks to achieve its investment objective by investing all of its
investable assets in a related portfolio. As spokes in a Hub and Spoke
structure, each of Fund A and Fund C seeks to achieve its investment objective
by investing all of its investable assets in the Portfolio.
Fund A is a separate series of Trust A and Fund C is a separate series of
Trust C. Trust A and Trust C are Massachusetts business trusts. Fund A and Fund
C (each a "Fund" and collectively the "Funds") each seeks to achieve its
investment objective by investing all of its investable assets in the Portfolio.
The Portfolio is a separate series of Select Advisors Portfolios, a New York
master trust registered as an open-end diversified management investment company
(the "Portfolio Trust"). The Advisor serves as the Portfolio Trust's investment
advisor and each Trust's sponsor. The
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(1) Hub and Spoke(R) is a registered service mark of Signature Financial
Group, Inc. ("Signature"). The terms "Hub(SM)" and "Spoke(SM)" are service marks
of Signature.
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address of the Advisor is 311 Pike Street, Cincinnati, Ohio 45202. The Advisor,
in its capacity as the Portfolio Trust's investment advisor, has engaged a
number of portfolio advisors (i.e., subadvisors) to manage the separate
portfolios of the Portfolio Trust.
At a meeting held on August 15, 1997, the Board of Trustees of the
Portfolio Trust voted to replace the Portfolio's prior subadvisor and approved
the Advisor's selection of Scudder as portfolio advisor to the Portfolio. A new
portfolio advisory agreement with Scudder is effective as of September 1, 1997
(the "Current Portfolio Advisory Agreement"). Except as described herein, the
terms of the Current Portfolio Advisory Agreement are substantially similar to
the terms of the portfolio advisory agreement that had been in effect prior to
September 1, 1997.
As a result of the requirements of the Investment Company Act of 1940, as
amended (the "1940 Act"), shareholder approval is required to continue the
Current Portfolio Advisory Agreement with Scudder for a period of more than 120
days from its effective date.
At the Meeting, Shareholders are being asked to approve the Current
Portfolio Advisory Agreement between the Advisor and Scudder. Except for the fee
arrangement, the addition of provisions regarding Scudder's possible use of an
affiliated broker-dealer to execute transactions on behalf of the Portfolio (the
"affiliated brokerage provisions"), and the other differences noted under
"Current Portfolio Advisory Agreement" below, the Current Portfolio Advisory
Agreement is identical in all material respects to the portfolio advisory
agreement dated September 9, 1994, that had been in effect between the Advisor
and Fort Washington Investment Advisors, Inc. ("Fort Washington"), an affiliate
of WSLAC, until August 31, 1997 (the "Prior Portfolio Advisory Agreement"). A
copy of the Current Portfolio Advisory Agreement is set forth in Exhibit A to
this Proxy Statement.
Under the investment advisory agreement between the Portfolio Trust (on
behalf of the Portfolio) and the Advisor, the Advisor at its expense may select,
subject to the review and approval of the Portfolio Trust's Board of Trustees, a
portfolio advisor or portfolio advisors to manage the investments of the
Portfolio. For information regarding Scudder that the Board of Trustees
considered in making this selection, see "Information about Scudder."
PRIOR PORTFOLIO ADVISORY AGREEMENT
Fort Washington served as portfolio advisor for the assets of the Portfolio
under the Prior Portfolio Advisory Agreement. The Prior Portfolio Advisory
Agreement was approved by the initial shareholders of each Fund on September 1,
1994 and was last approved by each Trust's Trustees, including the Trustees who
were not "interested persons," on December 19, 1996. Fort Washington resigned as
portfolio advisor to the Portfolio, and the Prior Portfolio Advisory Agreement
was terminated by the parties, effective as of the close of business on
August 31, 1997.
Under the Prior Portfolio Advisory Agreement, Fort Washington received from
the Advisor an annual fee for its services equal to .45% of the average daily
net assets of the Portfolio. At
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December 31, 1996, net assets of the Portfolio were $20,956,160. For the fiscal
year ended December 31, 1996, the Advisor paid fees of $_______ to Fort
Washington for its services under the Prior Portfolio Advisory Agreement.
CURRENT PORTFOLIO ADVISORY AGREEMENT
The Current Portfolio Advisory Agreement was approved by each Trust's
Trustees, including the Trustees who were not "interested persons," on August
15, 1997. The terms of the Current Portfolio Advisory Agreement are
substantially identical to those of the Prior Portfolio Advisory Agreement,
except as follows: (1) The Current Portfolio Advisory Agreement has a different
fee arrangement, (2) the Current Portfolio Advisory Agreement contains the
affiliated brokerage provisions described below, (3) the Prior Portfolio
Advisory Agreement provided for the Advisor to indemnify Fort Washington under
certain circumstances, while the Current Portfolio Advisory Agreement has no
such indemnification clause, and (4) the Current Portfolio Advisory Agreement
states that Scudder may pay a broker-dealer who provides research services to
the Portfolio a commission for effecting a portfolio transaction higher than the
commission another broker or dealer would have charged if, in addition to the
satisfaction of other conditions, the Portfolio derives or will derive a
significant benefit from such research services (a "significant benefit
clause"). The Prior Portfolio Advisory Agreement did not contain a significant
benefit clause. The description of the Current Portfolio Advisory Agreement set
forth in this Proxy Statement is qualified in its entirety by reference to
Exhibit A.
Under the Current Portfolio Advisory Agreement, Scudder manages the
investment and reinvestment of the assets of the Portfolio, subject to and in
accordance with the investment objectives, policies and restrictions of the
Portfolio and any directions which the Advisor or the Portfolio Trust's Board of
Trustees may give from time to time with respect to the Portfolio. In this
regard, Scudder will make all determinations with respect to the investment of
the Portfolio's assets and the purchase and sale of portfolio securities. In
addition, Scudder will determine the manner in which voting rights, rights to
consent to corporate action and any other rights pertaining to the Portfolio's
securities will be exercised. Scudder will render regular reports to the
Portfolio Trust's Board of Trustees, to the Advisor and to any advisor(s) that
the Advisor engages to assist it in evaluating Scudder's performance and
activities.
The Current Portfolio Advisory Agreement states that Scudder's primary
objective when placing orders with brokers and dealers will be to obtain the
most favorable price and execution available for the Portfolio. In placing such
orders Scudder may consider a number of factors, including, without limitation,
the overall direct net economic result to the Portfolio (including commissions,
which may not be the lowest available but ordinarily should not be higher than
the generally prevailing competitive rate), 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. Scudder is specifically
authorized, to the extent authorized by law, to pay a broker or dealer who
provides research services to Scudder an amount
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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. However, such payment is permissible only if Scudder
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 and that the Portfolio derives or will derive a reasonably significant
benefit from such research services.
The affiliated brokerage provisions in the Current Portfolio Advisory
Agreement permit Scudder to place brokerage transactions with broker-dealers
affiliated with Scudder ("Affiliated Brokers"). However, the Current Portfolio
Advisory Agreement provides that Scudder may effect securities transactions for
the Portfolio only if (1) the commissions, fees or other remuneration received
or to be received by it are reasonable and fair compared to the commissions,
fees or other remuneration received by other brokers in connection with
comparable transactions involving similar securities being purchased or sold on
a securities exchange during a comparable period of time, and (2) the Trustees
of each Trust, including a majority of those Trustees who are not interested
persons of the respective Trust, have adopted procedures pursuant to Rule 17e-1
under the 1940 Act for determining the permissible level of such commissions.
Each Board of Trustees has previously adopted such procedures. Therefore,
Scudder's use of Affiliated Brokers to execute transactions on behalf of the
Portfolio should not result in an increase in brokerage commissions paid by the
Portfolio.
The Current Portfolio Advisory Agreement will, assuming it is approved by
shareholders pursuant to this Proxy Statement, continue in effect until December
31, 1998, and it will continue thereafter provided that such continuance is
specifically approved by the Advisor and Scudder and, in addition, at least
annually by (1) the vote of the holders of a majority of the outstanding voting
securities of the Portfolio or by vote of a majority of the Portfolio Trust's
Board of Trustees and (2) by the vote of a majority of the Trustees of the
Portfolio Trust who are not parties to the Current Portfolio Advisory Agreement
or interested persons of either the Advisor or Scudder, cast in person at a
meeting called for the purpose of voting on such approval.
The Current Portfolio Advisory Agreement may be terminated at any time,
without payment of any penalty (1) by the Advisor, by the Portfolio Trust's
Board of Trustees or by a vote of the majority of the outstanding voting
securities of the Portfolio, in any such case upon at least 60 days' prior
written notice to Scudder, and (2) by Scudder upon at least 60 days' prior
written notice to the Advisor and the Portfolio Trust. The Current Portfolio
Advisory Agreement will also terminate upon written notice by one party to the
other party that the other party is in material breach of the agreement, unless
the other party in material breach of the agreement cures such breach to the
reasonable satisfaction of the party alleging the breach within 30 days after
the written notice. The Current Portfolio Advisory Agreement terminates
automatically in the event of its assignment. As a result of the requirements of
the 1940 Act, the Current Portfolio Advisory Agreement will terminate
automatically 120 days from its effective date unless the Agreement is approved
by shareholders prior to such date.
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The Current Portfolio Advisory Agreement provides that, absent willful
misfeasance, bad faith, gross negligence, or reckless disregard of its
obligations or duties under the Current Portfolio Advisory Agreement on the part
of Scudder, Scudder will not be subject to liability to the Advisor, the
Portfolio Trust or to any holder of an interest in the Portfolio for any act or
omission in the course of, or connected with, rendering services under the
Current Portfolio Advisory Agreement or for any losses that may be sustained in
the purchase, holding or sale of any security.
The Advisor pays the fees earned by Scudder with respect to its management
of the Portfolio's assets. As compensation for its services, Scudder will be
paid a monthly fee equal on an annual basis to: 0.50% of the first $150 million
of the combined average daily net assets of the Portfolio and the Growth &
Income Portfolio II of the Portfolio Trust, and .45% of the combined average
daily net assets of the Portfolio and the Growth & Income Portfolio II of the
Portfolio Trust in excess of $150 million. This represents an increase of .05%
to be paid on the first $150 million of the combined average daily net assets of
the Portfolio and the Growth & Income Portfolio II of the Portfolio Trust over
the fee paid under the Prior Portfolio Advisory Agreement.
INFORMATION ABOUT SCUDDER
Scudder is one of the most experienced investment counsel firms in the
United States. It was established in 1919 as a partnership and was restructured
as a Delaware corporation in 1985. The principal source of Scudder's income is
professional fees received from providing continuing investment advice. Scudder
provides investment counsel for many individuals and institutions, including
insurance companies, endowments, industrial corporations and financial and
banking organizations.
Daniel Pierce* is the chairman of the Board of Scudder, Edmond D. Villani#
is President and Chief Executive Officer of Scudder, Stephen R. Beckwith#, Lynn
S. Birdsong#, Nicholas Bratt#, E. Michael Brown*, Mark S. Casady*, Linda C.
Coughlin*, Margaret D. Hadzima*, Jerard K. Hartman#, Richard A. Holt@, John T.
Packard+, Kathryn L. Quirk#, Cornelia M. Small# and Stephen A. Wohler* are the
other members of the Board of Directors of Scudder (see footnote for symbol key
showing each person's address). The principal occupation of each of the above
named individuals is serving as a Managing Director of Scudder.
All of the outstanding voting and nonvoting securities of Scudder are held
of record by Stephen R. Beckwith, Juris Padegs#, Daniel Pierce, and Edmond D.
Villani in their capacity as the representatives of the beneficial owners of
such securities (the "Representatives"), pursuant to a Security Holders'
Agreement among Scudder, the beneficial owners of securities of Scudder and such
Representatives. Pursuant to the Security Holders' Agreement, the
Representatives have the right to reallocate shares among the beneficial owners
from time to time. Such
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* Two International Place, Boston, Massachusetts
# 345 Park Avenue, New York, New York
+ 101 California Street, San Francisco, California
@ Two Prudential Plaza, 180 North Stetson, Suite 5400, Chicago, Illinois
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reallocations will be at net book value in cash transactions. All Managing
Directors of Scudder own voting and nonvoting stock and all Principals of
Scudder own nonvoting stock.
The Portfolio will be managed by a team of Scudder investment
professionals. They are supported by Scudder's large staff of economists,
research analysts, traders and other investment specialists who work in
Scudder's offices across the United States and abroad. Scudder believes its team
approach benefits investors by bringing together many disciplines and leveraging
Scudder's extensive resources.
PORTFOLIO MANAGEMENT
Lead Product Manager, Robert T. Hoffman, leads a team of investment
professionals responsible for the management of the Portfolio and other
portfolios managed in a similar fashion. Mr. Hoffman is responsible for setting
the Portfolio's stock investing strategy and overseeing the Portfolio's
day-to-day operations. Mr. Hoffman, who joined Scudder in 1990 as a portfolio
manager, has 13 years of experience in the investment industry, including
several years of pension fund management experience.
Lori Ensinger, Lead Portfolio Manager, joined the portfolio management team
in 1993. Ms. Ensinger focuses on stock selection and investment strategy. She
has worked as a portfolio manager since 1983, and joined Scudder in 1993.
Deborah Chaplin, Portfolio Manager, has focused on stock selection and
investment strategy since joining the portfolio management team in 1997. Ms.
Chaplin, who joined Scudder in 1996 has over four years of experience as a
securities analyst and portfolio manager. Prior to joining Scudder, Ms. Chaplin
was a research fellow in the Faculty of Letters at Kyoto University, Japan.
Benjamin W. Thorndike, Portfolio Manager, is the Portfolio's chief analyst
and strategist for convertible securities. Mr. Thorndike, who has 18 years of
investment experience, joined Scudder in 1983 as a portfolio manager.
Kathleen T. Millard, Portfolio Manager, has been involved in the investment
industry since 1983 and has worked as a portfolio manager since 1986. Ms.
Millard, who joined the portfolio management team and Scudder in 1991, focuses
on strategy and stock selection.
Please refer to Exhibit B to this Proxy Statement, which identifies all
investment companies which have investment objectives similar to those of the
Portfolio and the Funds and for which Scudder acts as investment sub-advisor or
advisor. Exhibit B also discloses the fees charged such investment companies by
Scudder, and the size of each such investment company.
TRUSTEES' CONSIDERATION
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In considering the Current Portfolio Advisory Agreement, the Board of
Trustees of each Trust considered a number of factors, including the nature,
quality and extent of the services furnished by Scudder; Scudder's experience in
investing; possible economies of scale; Scudder's investment record; comparative
data as to investment performance, advisory fees and other fees, including
administrative fees, and expense ratios, particularly fee and expense ratios of
funds similar to the Portfolio, and other investment advisers; the risks assumed
by Scudder; the advantages and possible disadvantages to the Portfolio of having
an adviser which also serves other investment companies as well as other
accounts; possible benefits to Scudder from serving as subadvisor to the
Portfolio; Scudder's financial resources and the continuance of appropriate
incentives to assure that Scudder will continue to furnish high quality services
to the Portfolio; and various other factors.
The Board of Trustees of each Trust believes that the terms of the Current
Portfolio Advisory Agreement are fair to, and in the best interest of, the
Portfolio, the Portfolio Trust, Trust A and Trust C and the Shareholders of the
Portfolio, Fund A and Fund C. Each Trust's Board of Trustees, including the
independent Trustees of each Trust voting separately, recommends that
Shareholders approve the Current Portfolio Advisory Agreement between Scudder
and the Advisor. In making this recommendation, the Trustees considered the
nature and quality of the proposed services to be provided by Scudder to the
Portfolio, Scudder's past performance record with respect to growth & income
accounts, the scope of Scudder's portfolio management activities, Scudder's
investment philosophy and process, and the quality of Scudder's capabilities
generally. The Trustees also examined the background and experience of Scudder's
various officers and managers, especially those who would have direct
involvement in the Portfolio's management. Fees charged by entities providing
services comparable to those of Scudder were also considered.
After a comprehensive review of the matter, the Board of Trustees of each
Trust concluded that the Portfolio should receive investment advisory services
under the Current Portfolio Advisory Agreement equal or superior to those it had
received under the Prior Portfolio Advisory Agreements.
EACH TRUST'S BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS VOTE IN FAVOR OF THE
PROPOSAL.
PROPOSAL 2:
NEW PORTFOLIO SUB-ADVISORY AGREEMENT
On June 26, 1997, Scudder entered into a Transaction Agreement (the
"Transaction Agreement") with Zurich Insurance Company ("Zurich"). Under the
terms of the Transaction Agreement, Zurich will acquire a majority interest in
Scudder, and Zurich Kemper Investments, Inc. ("ZKI"), a Zurich subsidiary, will
become part of Scudder. Scudder's name will be changed to Scudder Kemper
Investments, Inc. ("Scudder Kemper"). The foregoing are
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referred to as the "Transactions." ZKI, a Chicago-based investment adviser and
the adviser to the Kemper funds, has approximately $80 billion under management.
The headquarters of Scudder Kemper will be in New York. Edmond D. Villani,
Scudder's CEO, will continue as CEO of Scudder Kemper and will become a member
of Zurich's Corporate Executive Board.
As required by the 1940 Act, the Current Portfolio Advisory Agreement
provides of its automatic termination upon its "assignment." The 1940 Act
defines "assignment" to include any direct or indirect transfer of a controlling
block of the assignor's outstanding voting securities by a security holder of
the assignor. If the Transaction is consummated, it will give rise to an
"assignment" of the Current Portfolio Advisory Agreement and thus its
termination.
If the Transaction is consummated and the Current Portfolio Advisory
Agreement is terminated as a result, the Advisor and Scudder intend to enter
into a new portfolio advisory agreement (the "New Portfolio Advisory
Agreement"). The New Portfolio Advisory Agreement will not change any of the
terms of the Current Portfolio Advisory Agreement that will then be in effect,
except for the effective date and the change to Scudder's name.
At a meeting held on August 15, 1997, the Board of Trustees of the
Portfolio Trust voted to approve the Advisor's selection of Scudder Kemper as
portfolio advisor to the Portfolio subsequent to the Transactions and approved
the New Portfolio Advisory Agreement. To avoid the expense of another proxy
solicitation and meeting of each Fund's Shareholders, Shareholders of each Fund
are being asked to approve the New Portfolio Advisory Agreement at this time.
Thus, upon consummation of the Transaction and approval of the New Portfolio
Advisory Agreement by each Trust's Board of Trustees, the New Portfolio Advisory
Agreement will become effective without any additional vote of the Shareholders.
IF THE NEW PORTFOLIO ADVISORY AGREEMENT WITH SCUDDER KEMPER IS NOT APPROVED
BY SHAREHOLDERS, THE CURRENT PORTFOLIO ADVISORY AGREEMENT WOULD TERMINATE UPON
THE CLOSING OF THE TRANSACTIONS AND SCUDDER WOULD CEASE TO ACT AS PORTFOLIO
ADVISOR TO THE PORTFOLIO. In such event, the Boards or Trustees of the Trusts
would make such arrangements for the management of the Portfolio's
investments as it deemed appropriate and in the best interests of Shareholders.
INFORMATION CONCERNING THE TRANSACTIONS AND ZURICH
Under the Transaction Agreement, Zurich will pay $866.7 million in cash to
acquire two-thirds of Scudder's outstanding shares and will contribute ZKI to
Scudder for additional shares, following which Zurich will have a 79.1% fully
diluted equity interest in the combined business. Zurich will then transfer a
9.6% fully diluted equity interest in Scudder Kemper to a compensation pool for
the benefit of Scudder and ZKI employees, as well as cash and warrants on Zurich
shares for award to Scudder employees, in each case subject to five-year vesting
schedules. After giving effect to the Transactions, current Scudder shareholders
will have a 29.6% fully diluted equity interest in Scudder Kemper and Zurich
will have a 69.5% fully diluted interest in Scudder Kemper.
10
<PAGE> 14
The purchase price for Scudder or for ZKI in the Transactions is subject to
adjustment based on the impact to revenues of non-consenting clients, and will
be reduced if the annualized investment management fee revenues (excluding the
effect of market changes, but taking into account new assets under management)
from clients at the time of closing, as a percentage of revenue run rates as of
June 30, 1997 (the "Revenue Run Rate Percentage"), is less than 90%.
At the closing, Zurich and the other shareholders of Scudder Kemper will
enter into a Second Amended and Restated Holders Agreement (the "New SHA").
Under the New SHA, Scudder stockholders will be entitled to designate three of
the seven members of the Scudder Kemper board and two of the four members of an
Executive Committee, which will be the primary management-level committee of
Scudder Kemper. Zurich will be entitled to designate the other four members of
the Scudder Kemper board and the other two members of the Executive Committee.
The names, addresses and principal occupations of the initial
Scudder-designated directors of Scudder Kemper are as follows: Lynn S. Birdsong,
345 Park Avenue, New York, New York, Managing Director of Scudder; Cornelia M.
Small, 345 Park Avenue, New York, New York, Managing Director of Scudder; and
Edmond D. Villani, 345 Park Avenue, New York, New York, President and Chief
Executive Officer of Scudder.
The names, addresses and principal occupations of the initial
Zurich-designated directors of Scudder Kemper are as follows: Lawrence W. Cheng,
Mythenquai 2, Zurich, Switzerland, Chief Investment Officer for Investments and
Institutional Asset Management and the corporate functions of Securities and
Real Estate for Zurich; Steven M. Gluckstern, Mythenquai 2, Zurich, Switzerland,
responsible for Reinsurance, Structured Finance, Capital Market Products and
Strategic Investments, and a member of the Corporate Executive Board of Zurich;
Rolf Hueppi, Mythenquai 2, Zurich, Switzerland, Chairman of the Board and Chief
Executive Officer of Zurich; and Markus Rohrbasser, Mythenquai 2, Zurich,
Switzerland, Chief Financial Officer and member of the Corporate Executive Board
of Zurich.
The initial Scudder-designated Executive Committee members will be Messrs.
Birdsong and Villani (Chairman). The initial Zurich-designated Executive
Committee members will be Messrs. Cheng and Rohrbasser.
The New SHA requires the approval of a majority of the Scudder-based
directors for certain decisions, including changing the name of Scudder Kemper,
effecting an initial public offering before April 15, 2005, causing Scudder
Kemper to engage substantially in non-investment management and related
businesses, making material acquisitions or divestitures, making material
changes in Scudder Kemper's capital structure, dissolving or liquidating Scudder
Kemper, or entering into certain affiliate transactions with Zurich. The New SHA
also provides for various put and call rights with respect to Scudder Kemper
stock held by current Scudder employees, limitations on Zurich's ability to
purchase other asset management
11
<PAGE> 15
companies outside of Scudder Kemper, rights of Zurich to repurchase Scudder
Kemper stock upon termination of employment of Scudder Kemper personnel, and
registration rights for continuing Scudder shareholders.
The Transactions are subject to a number of conditions, including approval
by Scudder shareholders; the Revenue Run Rate Percentages of Scudder and ZKI
being at least 75%; Scudder and ZKI having obtained director and shareholder
approvals from registered funds representing 90% of assets of such funds under
management as of June 30, 1997; the absence of any restraining order or
injunction preventing the Transactions, or any litigation challenging the
Transactions that is reasonably likely to result in an injunction or
invalidation of the Transactions; and the continued accuracy of the
representations and warranties contained in the Transaction Agreement. The
Transactions are expected to close during the fourth quarter of 1997.
Founded in 1872, Zurich is a multinational, public corporation organized
under the laws of Switzerland. Its home office is located at Mythenquai 2, 8002
Zurich, Switzerland. Historically, Zurich's earnings have resulted from its
operations as an insurer as well as from its ownership of its subsidiaries and
affiliated companies (the "Zurich Insurance Group"). Zurich and the Zurich
Insurance Group provide an extensive range of insurance products and services,
and have branch offices and subsidiaries in more than 40 countries throughout
the world. Zurich Insurance Group is particularly strong in the insurance of
international companies and organizations. Over the past few years, Zurich's
global presence, particularly in the United States, has been strengthened by
means of selective acquisitions.
BOARD OF TRUSTEES EVALUATION
Scudder has informed the Trustees that the Transactions are not expected to
have a material effect on the operations of the Portfolio or on its
shareholders. No material change in Scudder's investment philosophy, policies or
strategies is currently envisioned. Neither the Transaction Agreement nor the
New SHA, by its terms, contemplates any changes, other than changes in the
ordinary course of business, in the management or operation of Scudder relating
to the Portfolio, the personnel managing the Portfolio or other services
provided to and business activities of the Portfolio. The Transactions also are
not expected to result in material changes in the senior management or personnel
of Scudder. Certain senior executives of Scudder, including Mr. Villani, have
entered into employment agreements, effective as of the closing of the
Transactions, with terms ranging from three to five years. Based on the
foregoing, Scudder does not anticipate that the Transactions will cause a
reduction in the quality of services provided to the Portfolio, or have any
adverse effect on Scudder's ability to fulfill its obligations under the New
Portfolio Advisory Agreement or on its ability to operate its businesses in a
manner consistent with its current practices.
12
<PAGE> 16
TRUSTEES' CONSIDERATION
In addition to the factors that the Board of each Trust considered in
evaluating the Transactions and their effect on the Portfolio, which included
(i) that there were no contemplated changes in senior management or personnel of
Scudder, in the investment philosophy, policies or strategy of the Portfolio as
a result of the Transactions, or in the quality of services provided to the
Portfolio by Scudder and (ii) the undertaking that no unfair burden would be
imposed upon the Portfolio as a result of the Transactions, the Board also took
into account that the New Portfolio Advisory Agreement, including the terms
relating to the services to be provided, and the fees and expenses payable,
thereunder, is on the same terms in all material respects as the Current
Portfolio Advisory Agreement. The Board noted that, in approving the Current
Portfolio Advisory Agreement, the Board of each Trust, including the independent
Trustees, had considered a number of factors, including the nature, quality and
extent of the services furnished by Scudder; the necessity of Scudder
maintaining and enhancing its ability to retain and attract capable personnel;
Scudder's experience in investing; possible economies of scale; Scudder's
investment record; comparative data as to investment performance, advisory fees
and other fees, including administrative fees, and expense ratios, particularly
fee and expense ratios of funds similar to the Portfolio, and other investment
advisers; the risks assumed by Scudder; the advantages and possible
disadvantages to the Portfolio of having an adviser which also serves other
investment companies as well as other accounts; possible benefits to Scudder
from serving as subadvisor to the Portfolio;
13
<PAGE> 17
Scudder's financial resources and the continuance of appropriate incentives to
assure that Scudder will continue to furnish high quality services to the
Portfolio; and various other factors.
The Board of Trustees of each Trust believes that the terms of the New
Portfolio Advisory Agreement are fair to, and in the best interest of, the
Portfolio, the Portfolio Trust, Trust A and Trust C and the Shareholders of the
Portfolio, Fund A and Fund C. Each Trust's Board of Trustees, including the
independent Trustees of each Trust voting separately, recommends that
Shareholders approve the New Portfolio Advisory Agreement between Scudder Kemper
and the Advisor. In making this recommendation, the Trustees considered the
nature and quality of the proposed services to be provided by Scudder Kemper to
the Portfolio, Scudder's past performance record with respect to growth & income
accounts, the scope of Scudder's portfolio management activities, Scudder's
investment philosophy and process, and the quality of Scudder's capabilities
generally. The Trustees also examined the background and experience of Scudder's
various officers and managers, especially those who would have direct
involvement in the Portfolio's management. Fees charged by entities providing
services comparable to those of Scudder were also considered.
After a comprehensive review of the matter, the Board of Trustees of each
Trust concluded that the Portfolio should receive investment advisory services
under the New Portfolio Advisory Agreement equal or superior to those it had
received under the Prior Portfolio Advisory Agreement.
EACH TRUST'S BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS VOTE IN FAVOR OF THE
PROPOSAL.
PROPOSAL 3:
AMENDMENT TO INVESTMENT ADVISORY AGREEMENT
BACKGROUND
At the Meeting, Shareholders are being asked to approve an amendment (the
"Amendment") to the investment advisory agreement (the "Investment Advisory
Agreement"), dated September 9, 1994 between the Portfolio Trust, on behalf of
the Portfolios, and the Advisor. The Amendment makes no change to the Investment
Advisory Agreement except to increase the fee paid to the Advisor by the
Portfolio Trust, on behalf of the Portfolio. Since Fund A and Fund C are
shareholders of the Portfolio, the Funds and ultimately Shareholders of the
Funds would bear the expense of the increased fee. However, a "cap" has been
placed on each Fund's expenses by the Advisor (currently effective through March
31, 1998). Unless the expense cap is removed or unless a Fund's aggregate
operating expenses are less than the expense cap for a given fiscal year, the
impact of the proposed increase in advisory fees is eliminated with respect to a
Fund's shareholders. (See footnote 1 set forth in "The Amendment" below for
further information
14
<PAGE> 18
regarding the expense cap.) A copy of the proposed Amended and Restated
Investment Advisory Agreement is set forth in Exhibit C to this Proxy Statement.
THE INVESTMENT ADVISORY AGREEMENT
The Investment Advisory Agreement was approved by the initial investors in
each Fund on September 1, 1994, and was last approved by each Trust's Board of
Trustees, including the Trustees who were not "interested persons," on December
19, 1996. Under the Investment Advisory Agreement, the Advisor manages the
investment and reinvestment of the Portfolio's assets. In fulfilling this
obligation, the Advisor may engage separate portfolio advisors, such as Scudder,
to make all determinations with respect to the investment of the Portfolio's
assets, and to effect the purchase and sale of portfolio securities. The
Investment Advisory Agreement provides that services by a portfolio advisor will
also include determining the manner in which voting rights, rights to consent to
corporate action and any other rights pertaining to the portfolio securities
will be exercised. Under the Investment Advisory Agreement, the Advisor causes
each portfolio advisor to render regular reports to the Portfolio Trust's Board
of Trustees.
The Investment Advisory Agreement continues in effect until December 31,
1997, and it will continue thereafter provided that such continuance is
specifically approved by the Portfolio Trust and the Advisor and, in addition,
at least annually by (1) the vote of holders of a majority of the outstanding
voting securities of the Portfolio or by vote of a majority of the Portfolio
Trust's Board of Trustees, and (2) by the vote of a majority of the Trustees of
the Portfolio Trust who are not parties to the Investment Advisory Agreement or
interested persons of the Advisor, cast in person at a meeting called for the
purpose of voting on such approval.
The Investment Advisory Agreement may be terminated at any time, with
respect to the Portfolio, without payment of any penalty, (1) by the Portfolio
Trust's Board of Trustees or by a vote of the majority of the outstanding voting
securities of the Portfolio upon 60 days' prior written notice to the Advisor
and (2) by the Advisor upon 60 days' prior written notice to the Portfolio
Trust.
The Investment Advisory Agreement provides that, absent willful
misfeasance, bad faith, gross negligence, or reckless disregard of obligations
or duties under the Investment Advisory Agreement on the part of the Advisor,
the Advisor will not be subject to liability to the Portfolio Trust or to any
holder of an interest in the Portfolio for any act or omission in the course of,
or connected with, rendering services under the Investment Advisory Agreement or
for any losses that may be sustained in the purchase, holding or sale of any
security. Under certain circumstances, the Portfolio Trust will indemnify the
Advisor against losses, claims, damages, liabilities or expenses resulting from
acts or omissions of the Portfolio Trust.
The Investment Advisory Agreement currently states that the Portfolio Trust
pays to the Advisor, as compensation for its services as investment advisor, a
fee that is equal on an annual basis to 0.75% of the average daily net assets of
the Portfolio.
15
<PAGE> 19
THE AMENDMENT
The Amendment was approved by each Trust's Board of Trustees, including the
Trustees who were not "interested persons," on August 15, 1997. The Amendment
proposes only to increase the fee paid by the Portfolio Trust, on behalf of the
Portfolio, to the Advisor. If adopted, the Amendment would increase the fee on
the first $150 million of average daily net assets of the Portfolio, on an
annual basis, from 0.75% of such average daily net assets of the Portfolio, to
0.80% of such average daily net assets of the Portfolio. The fee on average
daily net assets of the Portfolio in excess of $150 million will remain 0.75% of
such assets. The Amendment would not change the Investment Advisory Agreement in
any other respect.
--------------------------
For the fiscal year ended December 31, 1996, the following table provides
(1) the aggregate operating expenses of Fund A and the Portfolio, and (2) the
aggregate operating expenses of Fund C and the Portfolio, each expressed as a
percentage of average daily net assets of the relevant Fund. The table considers
both the current advisory fee paid to the Advisor and the proposed increased
advisory fee.
ANNUAL OPERATING EXPENSES
<TABLE>
<CAPTION>
FUND A FUND C
------ ------
CURRENT FEES PROPOSED FEES CURRENT FEES PROPOSED FEES
------------ ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Advisors Fee
Rule 12b-1
Fees
Other
Expenses(1)
(after waiver
and
reimbursement)
Total
Operating
Expenses(1)
(after waiver
and
reimbursement)
</TABLE>
- -----------
(1) The "Total Operating Expenses" charged to each Fund and the Portfolio will
not exceed the percentages listed above. The Advisor, in its capacity as sponsor
of each Trust, has agreed to waive or reimburse certain of the Operating
Expenses of each Fund and the Portfolio (as used herein,
16
<PAGE> 20
"Operating Expenses" includes amortization of organizational expenses but is
exclusive of interest, taxes, brokerage commissions and other portfolio
transaction expenses, capital expenditures and extraordinary expenses) such
that, after such waivers or reimbursements, the aggregate Operating Expenses of
each Fund and the Portfolio will not exceed on an annual basis the "Total
Operating Expenses" listed above (the "Expense Caps"). An Expense Cap may be
terminated with respect to a Fund by the Advisor, in its capacity as sponsor, as
of the end of any calendar quarter after December 31, 1997, by giving at least
30 days prior written notice, and the sponsor agreement will terminate with
respect to a Trust if the Advisor (or an affiliate that has assumed such
obligations) ceases to be the sponsor of such Trust or the Advisor of the
Portfolio Trust. For the year ended December 31, 1996, without the Expense Caps
and assuming current fees, "Other Expenses" and "Total Operating Expenses" would
have been (i) ___% and ____% for Fund A and the Portfolio, and (ii) _____% and
____% for Fund C and the Portfolio, respectively. For the year ended December
31, 1996, without the Expense Caps and assuming proposed fees, "Other Expenses"
and "Total Operating Expenses" would have been (I) ____% and ____% for Fund A
and the Portfolio, and (ii) ____% and ____% for Fund C and the Portfolio,
respectively.
-----------------
Based on expenses incurred for the year ended December 31, 1996, an
investor would pay the expenses set forth in the table below on a $1,000
investment, assuming (1) a 5% annual return, (2) the total operating expense
ratio set forth in the immediately preceding chart, and (3) redemption at the
end of each time period. The table considers both the current advisory fee paid
to the Advisor and the proposed increased advisory fee.
<TABLE>
<CAPTION>
FUND A FUND C
------ ------
CURRENT FEES PROPOSED FEES CURRENT FEES PROPOSED FEES
------------ ------------- ------------ -------------
<S> <C>
1 Year
3 Years
5 Years
10 Years
</TABLE>
INFORMATION ABOUT THE ADVISOR
The Advisor is a wholly-owned subsidiary of IFS Financial Services, Inc.,
which is a wholly-owned subsidiary
17
<PAGE> 21
of Western-Southern Life Assurance Company, located at 400 Broadway, Cincinnati,
Ohio 45202. Western-Southern Life Assurance Company is a wholly-owned subsidiary
of The Western and Southern Life Insurance Company. As of June 30, 1997, the
Advisor had assets under management of $____ million. For the fiscal year ended
December 31, 1996, the Advisor received $_______ from the Portfolio Trust (on
behalf of the Portfolio) for its services as investment advisor. Had the
Amendment been in effect for that period, the Advisor would have received
$______ from the Portfolio Trust (on behalf of the Portfolio) for its services
as investment advisor (an increase of ____% over the amount actually received).
For the fiscal year ended December 31, 1996, the Advisor waived all fees
for its services as sponsor to each Trust. If such fees had not been waived,
Trust A, on behalf of Fund A, and Trust C, on behalf of Fund C, would have paid
the Advisor, for its role as sponsor, $_____ and $______, respectively. Whether
or not the Amendment is approved by Shareholders, the Advisor will continue as
Sponsor to each Trust.
PRINCIPAL EXECUTIVE OFFICERS AND DIRECTORS OF THE ADVISOR
<TABLE>
<CAPTION>
POSITIONS AND OFFICES
---------------------
NAME AND ADDRESS* WITH TOUCHSTONE ADVISORS PRINCIPAL OCCUPATION
- ----------------- ------------------------ --------------------
<S> <C> <C> <C> <C> <C> <C>
James N. Clark* Director Executive Vice President,
The Western and Southern
Life Insurance Company
Edward G. Harness, Jr. Director, President and President, IFS Financial
Chief Executive Officer Services, Inc.
William F. Ledwin* Director Senior Vice President, The
Western and Southern
Life Insurance Company
Donald J. Wuebbling* Director, Secretary Vice President and General
and Chief Legal Officer Counsel, The Western and
Southern Life Insurance
Company
Edward S. Heenan* Vice President and Controller Vice President and
Comptroller, The Western
and Southern Life Insurance
Company
Brian Manley Vice President and Chief Vice President,
Financial Officer Touchstone Securities, Inc.
</TABLE>
18
<PAGE> 22
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Richard K. Taulbee* Vice President Vice President, The Western
and Southern Life Insurance
Company
Patricia Wilson Chief Compliance Officer same
Robert F. Morand* Assistant Secretary Attorney,
The Western and Southern
Life Insurance Company
Robert A. Dressman* Assistant Treasurer Assistant Treasurer,
The Western and Southern
Life Insurance Company
Timothy D. Speed* Assistant Treasurer Assistant Vice President,
The Western and Southern
Life Insurance Company
</TABLE>
- -----------------
*Principal business address is 400 Broadway, Cincinnati, Ohio 45202
TRUSTEES' CONSIDERATION
The Board of Trustees of each Trust believes that the terms of the
Amendment are fair to, and in the best interest of, the Portfolio, the Portfolio
Trust, Trust A and Trust C and the Shareholders of the Portfolio, Fund A and
Fund C. Each Trust's Board of Trustees, including the independent Trustees of
each Trust voting separately, recommends approval by the Shareholders of the
Amendment. In making this recommendation, the Trustees considered the nature and
quality of the services that the Advisor has provided to the Portfolio, the fees
charged by investment advisors providing services comparable to those of the
Advisor and the fees that would be charged to the Advisor by Scudder, if it is
selected as a portfolio advisor. After consideration of the matter, the Board of
Trustees of each Trust concluded that the fee increase proposed in the Amendment
was appropriate.
EACH TRUST'S BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS VOTE IN FAVOR OF THE
PROPOSAL.
PROPOSAL 4
AMENDMENT TO FUNDAMENTAL INVESTMENT RESTRICTION
Under the 1940 Act, all investment policies of a mutual fund must be
classified as either "fundamental" or "non-fundamental." A fundamental policy
may not be changed without the
19
<PAGE> 23
approval of a fund's shareholders; a non-fundamental policy may be changed by
the Trustees without shareholder approval.
The Portfolio has adopted certain fundamental policies to reflect business
or industry conditions which in some cases are no longer in effect or have
changed. Accordingly, the Trustees have authorized a change to the investment
restriction adopted in connection with the Portfolio's investments in real
estate in order to clarify the applicability of such restriction, which is
required to be fundamental.
Investment Restriction no. 4 currently provides that:
"The Portfolio may not:
purchase or sell real estate (including limited partnership interests but
excluding securities secured by real estate or interests therein),
interests in oil, gas or mineral leases, commodities or commodity contracts
(except futures and option contracts) in the ordinary course of business
(except that the Portfolio (Trust) may hold and sell, for the Portfolio's
(Fund's) portfolio, real estate acquired as a result of the Portfolio's
(Fund's) ownership of securities)."
The Trustees propose to split Investment Restriction no. 4 into two
restrictions with respect to the Portfolio and to reword the restriction to
clarify that the Portfolio may invest in the securities of real estate
investment trusts ("REITs"). The Trustees have approved, subject to the approval
of Shareholders, the following two Investment Restrictions which would replace
Investment Restriction no. 4 with respect to the Portfolio:
"The Portfolio may not:
4a) purchase or sell real estate (except that (a) the Portfolio may
invest in (i) securities of entities that invest or deal in real estate,
mortgages, or interests therein and (ii) securities secured by real estate
or interests therein and (b) the Portfolio may hold and sell real estate
acquired as a result of the Portfolio's ownership of securities;
4b) purchase or sell interests in oil, gas or mineral leases,
commodities or commodity contracts (except futures and option contracts)
in the ordinary course of business.
TRUSTEES CONSIDERATION
The Board of Trustees of each Trust believes that the amendment to the
Portfolio's fundamental investment restriction relating to real estate is in the
best interest of the Portfolio, the
20
<PAGE> 24
Portfolio Trust, Trust A and Trust C and the Shareholders of the Portfolio, Fund
A and Fund C. Each Trust's Board of Trustees, including the independent Trustees
of each Trust voting separately, recommends approval by the Shareholders of
amended investment restriction. In making this recommendation, the Trustees
considered that the Portfolio's ability to adjust to a changing investment
environment will be enhanced by the amendment to the Portfolio's fundamental
investment restriction described above.
EACH TRUST'S BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS VOTE IN FAVOR OF THE
PROPOSAL.
REQUIRED VOTE AND TRUSTEES RECOMMENDATION FOR PROPOSALS
At the Meeting, the Shareholders of each Fund will vote on (i) the Current
Portfolio Advisory Agreement, (ii) the New Portfolio Advisory Agreement, (iii)
the Amendment to the Investment Advisory Agreement between the Portfolio Trust
and the Advisor, and (iv) the amendment to the Portfolio's fundamental
investment restriction relating to investments in real estate.
The affirmative vote of the holders of a "majority of the outstanding
voting securities" of the Portfolio, which are held in part by Fund A and Fund C
and the remainder by Western Southern Life Assurance Company through Separate
Account A, is required to approve each proposal. "Majority of the outstanding
voting securities" of the Portfolio for this purpose under the 1940 Act means
the lesser of (1) 67% of the securities of the Portfolio present, if more than
50% of the outstanding securities of the Portfolio are represented and voting,
or (2) more than 50% of such outstanding securities. Since Western Southern Life
Assurance Company, acting for the benefit of The Western & Southern Life
Insurance Company Pension Plan, whose assets are held by Separate Account A,
owns more than 50% of the outstanding securities of the Portfolio, and intends
to vote such securities in favor of each Proposal, it is expected that each
Proposal will be approved.
EACH TRUST'S BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS VOTE IN FAVOR OF
EACH PROPOSAL.
21
<PAGE> 25
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
As of June 30, 1997, the following persons were beneficial owners of more
than 5% of the outstanding shares of Fund A:
<TABLE>
<CAPTION> Amount and Nature of
Name and Address of Beneficial Owner Beneficial Ownership Percent of Class
- ------------------------------------ -------------------- ----------------
<S> <C> <C>
Western-Southern Life ______ _____%
Assurance Company
400 Broadway
Cincinnati, Ohio 45202
</TABLE>
As of June 30, 1997, the following persons were beneficial owners of more than
5% of the outstanding shares of Fund C:
<TABLE>
<CAPTION> Amount and Nature of
Name and Address of Beneficial Owner Beneficial Ownership Percent of Class
- ------------------------------------ -------------------- ----------------
<S> <C> <C>
Western-Southern Life _______ _____%
Assurance Company
400 Broadway
Cincinnati, Ohio 45202
J. Philip Carter, Trustee _______ _____%
Holiday, Florida 34690
</TABLE>
To the knowledge of the Trusts, no other Shareholder beneficially owned more
than 5% of the outstanding shares of Fund A or Fund C as of June 30, 1997.
As of June 30, 1997, the Trustees and officers of Trust A and Trust C as a
group beneficially owned less than 1% of the outstanding shares of Fund A and
Fund C, respectively.
GENERAL INFORMATION
ADMINISTRATOR AND PRINCIPAL UNDERWRITER
Investors Bank & Trust Company ("Investors Bank"), located 200 Clarendon
Street, Boston, Massachusetts 02116, provides administrative, custodial and fund
accounting services for each Trust and the Portfolio Trust and serves as
transfer agent for the Portfolio Trust.
22
<PAGE> 26
Touchstone Securities, Inc., located at 311 Pike Street, Cincinnati, Ohio
45202, serves as each Fund's distributor.
OTHER MATTERS TO COME BEFORE THE MEETING
The Trusts' management does not know of any matters to be presented at the
Meeting other than those described in this Proxy Statement. If other business
should properly come before the Meeting, the proxy holders will vote thereon in
accordance with their best judgment.
PORTFOLIO TRANSACTIONS
The Portfolio does not allocate its portfolio brokerage on the basis of the
sale of its shares, although brokerage firms whose customers purchase shares of
either Fund may participate in brokerage commissions. Brokerage transactions are
not placed with any person affiliated with the Trusts, the Portfolio Trust or
the Advisor. Scudder may place brokerage transactions with Scudder Investor
Services, Inc. ("SIS"), an affiliate of Scudder. SIS may be a major recipient of
brokerage commissions paid by the Portfolio.
SHAREHOLDER PROPOSALS
The Meeting is a special meeting of Shareholders. Neither the Trusts nor
the Portfolio Trust is required to, nor do any of them intend to, hold regular
annual meetings of its shareholders or interest holders. If such a meeting is
called, any shareholder who wishes to submit a proposal for consideration at the
meeting should submit the proposal promptly to the respective Trust or the
Portfolio Trust, as the case may be.
REPORTS TO SHAREHOLDERS
Each Trust will furnish, without charge, a copy of the most recent Annual
Report to Shareholders of the respective Fund upon request within three business
days of the request. Requests for such reports can be made by calling (800)
669-2796 (press 3) or in writing to the respective Trust, 311 Pike Street,
Cincinnati, Ohio 45202.
SCUDDER AND ZURICH INFORMATION
All information contained in this Proxy Statement about Scudder, Zurich,
their respective affiliates, and the Transactions has been provided by Scudder.
IN ORDER THAT THE PRESENCE OF A QUORUM AT THE MEETING MAY BE ASSURED, PROMPT
EXECUTION AND RETURN OF THE ENCLOSED PROXY IS
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<PAGE> 27
REQUESTED. A SELF-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR
CONVENIENCE.
By Order of the Board of Trustees of each Trust.
Andrew S. Josef
Secretary
August 29, 1997
Cincinnati, Ohio
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<PAGE> 28
EXHIBIT A
PORTFOLIO ADVISORY AGREEMENT
SELECT ADVISORS PORTFOLIOS
GROWTH & INCOME PORTFOLIO
GROWTH & INCOME II PORTFOLIO
This PORTFOLIO ADVISORY AGREEMENT is made as of the ___ day of
______________, 1997, by and between TOUCHSTONE ADVISORS, INC., an Ohio
corporation (the "Advisor"), and Scudder Stevens & Clark Inc. (the "Portfolio
Advisor"),
-----------------------------------.
WHEREAS, the Advisor has been organized to operate as an investment advisor
registered under the Investment Advisers Act of 1940, as amended (the "Advisers
Act"), and has been retained by Select Advisors Portfolios (the "Trust"), a New
York trust organized pursuant to a Declaration of Trust dated February 7, 1994
and registered as an open-end management investment company under the Investment
Company Act of 1940 (the "1940 Act") to provide investment advisory services to
the Growth & Income Portfolio and the Growth and Income II Portfolio (herein
together the "Portfolio"); and
WHEREAS, the Portfolio Advisor also is an investment advisor registered
under the Advisers Act; and
WHEREAS, the Advisor desires to retain the Portfolio Advisor to furnish it
with portfolio management services in connection with the Advisor's investment
advisory activities on behalf of the Portfolio, and the Portfolio Advisor is
willing to furnish such services to the Advisor and the Portfolio;
NOW THEREFORE, in consideration of the terms and conditions hereinafter set
forth, it is agreed as follows:
1. EMPLOYMENT OF THE PORTFOLIO ADVISOR. In accordance with and subject to
the Investment Advisory Agreement between the Trust and the Advisor, attached
hereto as Exhibit A (the "Advisory Agreement"), the Advisor hereby appoints the
Portfolio Advisor to manage the investment and reinvestment of those assets of
the Portfolio allocated to it by the Advisor (the "Portfolio Assets"), subject
to the control and direction of the Advisor and the Trust's Board of Trustees,
for the period and on the terms hereinafter set forth. The Advisor hereby
represents that (i) it has authority under the Advisory Agreement to appoint the
Portfolio Advisor to act as an investment adviser to the Trust, (ii) this
Agreement is valid and binding upon the Advisor, and (iii) with respect to this
Agreement, the conditions of Rule 15a-4 under the 1940 Act have been fulfilled.
The Portfolio Advisor hereby accepts such employment and agrees during such
period
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<PAGE> 29
to render the services and to perform the duties called for by this Agreement
for the compensation herein provided. The Portfolio Advisor shall at all times
maintain its registration as an investment advisor under the Advisers Act and
shall otherwise comply in all material respects with all applicable laws and
regulations, both state and federal. The Portfolio Advisor shall for all
purposes herein be deemed an independent contractor and shall, except as
expressly provided or authorized (whether herein or otherwise), have no
authority to act for or represent the Trust in any way or otherwise be deemed an
agent of the Trust or the Portfolio.
2. DUTIES OF THE PORTFOLIO ADVISOR. The Portfolio Advisor will provide the
following services and undertake the following duties:
a. The Portfolio Advisor will manage the investment and reinvestment
of the Portfolio Assets, subject to and in accordance with the investment
objectives, policies and restrictions of the Portfolio and any directions
which the Advisor or the Trust's Board of Trustees may give from time to
time with respect to the Portfolio. In furtherance of the foregoing, the
Portfolio Advisor will make all determinations with respect to the
investment of the Portfolio Assets and the purchase and sale of portfolio
securities and shall take such steps as may be necessary or advisable to
implement the same. The Portfolio Advisor also will determine the manner in
which voting rights, rights to consent to corporate action and any other
rights pertaining to the portfolio securities will be exercised. The
Portfolio Advisor will render regular reports to the Trust's Board of
Trustees, to the Advisor and to RogersCasey Consulting, Inc. (or such other
advisor or advisors as the Advisor shall engage to assist it in the
evaluation of the performance and activities of the Portfolio Advisor).
Such reports shall be made in such form and manner and with respect to such
matters regarding the Portfolio and the Portfolio Advisor as the Trust, the
Advisor or RogersCasey Consulting, Inc. shall from time to time reasonably
request.
b. The Portfolio Advisor shall provide support to the Advisor with
respect to the marketing of the Portfolio in a manner comparable to the
support provided to comparable clients of the Portfolio Advisor, including
but not limited to: (i)permission to use the Portfolio Advisor's name as
provided in Section 6, (ii)permission to use the past performance and
investment history of the Portfolio Advisor as the same is applicable to
the Portfolio provided counsel to the Trust determine that the use of such
information and the manner of presentation of such information is legally
permissible, (iii) access to the individual(s) responsible for day-to-day
management of the Portfolio for marketing conferences, teleconferences and
other activities involving the promotion of the Portfolio, subject to the
reasonable request of the Advisor, (iv) permission to use biographical and
historical data of the Portfolio Advisor and individual manager(s), and
(v)with respect to clients whose names are provided to the Advisor by the
Portfolio Advisor in writing prior to use, permission to use the names of
these clients, subject to any restrictions imposed by these clients on the
use of such names or by the Advisers Act and the rules adopted thereunder.
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<PAGE> 30
c. The Portfolio Advisor will, in the name of the Portfolio, place
orders for the execution of all portfolio transactions in accordance with
the policies with respect thereto set forth in the Trust's registration
statements under the 1940 Act and the Securities Act of 1933, as such
registration statements may be in effect from time to time. In connection
with the placement of orders for the execution of portfolio transactions,
the Portfolio Advisor will create and maintain all necessary brokerage
records of the Portfolio in accordance with all applicable laws, rules and
regulations, including but not limited to records required by Section 31(a)
of the 1940 Act. All records shall be the property of the Trust and shall
be available for inspection and use by the Securities and Exchange
Commission (the "SEC"), the Trust or any person retained by the Trust.
Where applicable, such records shall be maintained by the Advisor for the
periods and in the places required by Rule 31a-2 under the 1940 Act. When
placing orders with brokers and dealers, the Portfolio Advisor shall seek
to obtain the most favorable price and execution available for the
Portfolio, and in placing such orders the Portfolio Advisor may consider a
number of factors, including, without limitation, the overall direct net
economic result to the Portfolio (including commissions, which may not be
the lowest available but ordinarily should not be higher than the generally
prevailing competitive rate), the financial strength and stability of the
broker, the efficiency with which the transaction will be effected, the
ability to effect the transaction at all where a large block is involved
and the availability of the broker or dealer to stand ready to execute
possibly difficult transactions in the future. The Portfolio Advisor is
specifically authorized, to the extent authorized by law (including,
without limitation, Section 28(e) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")), to pay a broker or dealer who provides
research services to the Portfolio Advisor an amount of commission for
effecting a portfolio transaction in excess of the amount of commission
another broker or dealer would have charged for effecting such transaction,
in recognition of such additional research services rendered by the broker
or dealer, but only if the Portfolio Advisor determines in good faith that
the excess commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer viewed in
terms of the particular transaction or the Portfolio Advisor's overall
responsibilities with respect to discretionary accounts that it manages,
and that the Portfolio derives or will derive a reasonably significant
benefit from such research services. The Portfolio Advisor will present a
written report to the Board of Trustees of the Trust, at least quarterly
and at such other times as reasonably requested by the Board of Trustees,
indicating total brokerage expenses, actual or imputed, as well as the
services obtained in consideration for such expenses, broken down by
broker-dealer and containing such information as the Board of Trustees
reasonably shall request.
d. The Portfolio Advisor may execute standard account documentation,
agreements, contracts and other documents (collectively "Account
Documents") as the Portfolio Advisor may be requested by brokers, dealers,
counterparties and other persons in connection with the Portfolio Advisor's
management of the Portfolio Assets, provided
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<PAGE> 31
that the Advisor and the Trust's Board of Trustees first authorize the
Portfolio Advisor to execute Account Documents. In such respect, and only
for this limited purpose, the Portfolio Adviser shall act as the agent
and/or attorney-in-fact of the Trust and/or the Advisor.
e. The Advisor recognizes that, subject to the provisions of Section
2c, Scudder Investor Services, Inc. or its successor ("SIS"), an affiliate
of the Portfolio Advisor, may act as the regular broker for the portfolio
so long as it is lawful for it so to act and that SIS may be a major
recipient of brokerage commissions paid by the portfolio. SIS may effect
securities transactions for the portfolio only if (i) the commissions, fees
or other remuneration received or to be received by it are reasonable and
fair compared to the commissions, fees or other remuneration received by
other brokers in connection with comparable transactions involving similar
securities being purchased or sold on a securities exchange during a
comparable period of time and (ii) the Trustees, including a majority of
those Trustees who are not interested persons, have adopted procedures
pursuant to Rule 17e-1 under the 1940 Act for determining the permissible
level of such commissions.
f. The Advisor understands that (i) when orders to purchase or sell
the same security on identical terms are placed by more than one of the
funds and/or other advisory accounts managed by the Portfolio Advisor or
its affiliates, the transactions generally will be executed as received,
although a fund or advisory account that does not direct trades to a
specific broker ("free trades") usually will have its order executed first,
(ii) although all orders placed on behalf of the Portfolio will be
considered free trades, having an order placed first in the market does not
necessarily guarantee the most favorable price, and (iii) purchases will be
combined where possible for the purpose of negotiating brokerage
commissions, which in some cases might have a detrimental effect on the
price or volume of the security in a particular transaction as far as the
Portfolio is concerned.
g. The Portfolio Advisor may enter into arrangements with other
persons affiliated with the Portfolio Advisor for the provision of certain
personnel and facilities to the Portfolio Advisor to better enable it to
fulfill its duties and obligations under this Agreement.
h. In the event of any reorganization or other change in the Portfolio
Advisor, its investment principals, supervisors or members of its
investment (or comparable) committee, the Portfolio Advisor shall give the
Advisor and the Trust's Board of Trustees written notice of such
reorganization or change within a reasonable time (but not later than 30
days) after such reorganization or change.
i. The Portfolio Advisor will bear its expenses of providing services
to the Portfolio pursuant to this Agreement except such expenses as are
undertaken by the Advisor or the Trust.
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<PAGE> 32
j. The Portfolio Advisor will manage the Portfolio Assets and the
investment and reinvestment of such assets so as to seek to comply with the
provisions of the 1940 Act and with Subchapter M of the Internal Revenue
Code of 1986, as amended.
3. COMPENSATION OF THE PORTFOLIO ADVISOR.
a. As compensation for the services to be rendered and duties
undertaken hereunder by the Portfolio Advisor, the Advisor will pay to the
Portfolio Advisor a monthly fee equal on an annual basis to 0.45% of the
average daily net assets of the Portfolio. Commencing as of the date next
following the date upon which the owners of interests in the Portfolio
shall have approved such change, the Advisor will pay to the Portfolio
Advisor a monthly fee equal to 0.50% of the first $150 million of the
average daily net assets of the Portfolio, and 0.45% of such average daily
net assets in excess of $150 million.
b. The fee of the Portfolio Advisor hereunder shall be computed and
accrued daily and paid monthly. If the Portfolio Advisor serves in such
capacity for less than the whole of any period specified in Section 3a, the
fee to the Portfolio Advisor shall be prorated. For purposes of calculating
the Portfolio Advisor's fee, the daily value of the Portfolio's net assets
shall be computed by the same method as the Trust uses to compute the net
asset value of the Portfolio for purposes of purchases and redemptions of
interests thereof.
c. The Portfolio Advisor reserves the right to waive all or a part of
its fees hereunder.
4. ACTIVITIES OF THE PORTFOLIO ADVISOR. It is understood that the Portfolio
Advisor may perform investment advisory services for various other clients,
including other investment companies. Furthermore, it is understood that the
Portfolio Advisor may give advice, and take action, with respect to its other
clients that may differ from the advice given, or the time and nature of action
taken, with respect to the Portfolio. The Portfolio Advisor will report to the
Board of Trustees of the Trust (at regular quarterly meetings and at such other
times as such Board of Trustees reasonably shall request) (i) the financial
condition and prospects of the Portfolio Advisor, (ii) the nature and amount of
transactions affecting the Portfolio that involve the Portfolio Advisor and
affiliates of the Portfolio Advisor, (iii)information regarding any potential
conflicts of interest arising by reason of its continuing provision of advisory
services to the Portfolio and to its other accounts, and (iv) such other
information as the Board of Trustees shall reasonably request regarding the
Portfolio, the Portfolio's performance, the performance of other comparable
accounts to whom the Portfolio Advisor provides services, and the plans of, and
the capability of, the Portfolio Advisor with respect to providing future
services to the Portfolio and its other accounts. The Portfolio Advisor agrees,
on an ongoing basis, to notify the Advisor of any change in the individual(s)
responsible for day-to-day management of the
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<PAGE> 33
Portfolio and any material change in the investment strategies employed by the
Portfolio Advisor in managing the Portfolio. At least annually, the Portfolio
Advisor shall report to the Trustees the total number and type of such other
accounts and the approximate total asset value thereof (but not the identities
of the beneficial owners of such accounts). The Portfolio Advisor agrees to
submit to the Trust a statement defining its policies with respect to the
allocation of investment opportunities among the Portfolio and its other
clients.
It is understood that the Portfolio Advisor may become interested in the
Trust as an interest holder or otherwise.
The Portfolio Advisor has supplied to the Advisor and the Trust copies of
its Form ADV with all exhibits and attachments thereto (including the Portfolio
Advisor's statement of financial condition) and will hereafter supply to the
Advisor, promptly upon the preparation thereof, copies of all amendments or
restatements of such document.
Nothing in this Agreement shall prevent the Portfolio Advisor, any parent,
subsidiary or affiliate, or any director or officer thereof, from acting as
investment advisor for any other person, firm, or corporation, and shall not in
any way limit or restrict the Portfolio Advisor or any of its directors,
officers, stockholders or employees from buying, selling or trading any
securities or commodities for its or their own account or for the account of
others for whom it or they may be acting, if such activities will not adversely
affect or otherwise impair the performance by the Portfolio Advisor of its
duties and obligations under this Agreement. The Portfolio Advisor will (i)
supply to the Advisor, upon the execution of this Agreement, with a true copy of
its currently effective Code of Ethics and policies regarding insider trading
and (ii) thereafter supply to Advisor copies of any amendments to or
restatements of such Code of Ethics or insider trading policies. The Portfolio
Advisor agrees to provide the Advisor, on a quarterly basis, a report with
respect to material violations of the Portfolio Advisor's Code of Ethics or
insider trading policies by portfolio managers who have responsibility for
managing the Portfolio or a written statement indicating that no such violations
have occurred during the quarter. In addition, the Portfolio Advisor agrees to
provide to the Advisor other information concerning violations of its Code of
Ethics or insider trading policies to the same extent as it provides such
information to the Boards of Directors of its proprietary mutual funds. The
parties agree to be bound by the provisions of Rule 17j-1 under the 1940 Act as
it may be amended to the extent that the provisions of the Rule are stricter
than the provisions of this paragraph.
5. PROVISION OF INFORMATION BY THE ADVISOR. To facilitate the Portfolio
Advisor's fulfillment of its obligations under this Agreement, the Advisor
agrees (i)promptly to provide the Portfolio Advisor with all amendments or
supplements to the Trust's registration statements, its Agreement and
Declaration of Trust, and its By-Laws, (ii) on an ongoing basis, to notify the
Portfolio Advisor expressly in writing of each change in the fundamental and
nonfundamental investment policies of the Portfolio, (iii) to provide or cause
to be provided to the Portfolio Advisor on an ongoing basis such assistance as
may be reasonably requested by the Portfolio Advisor in connection with its
activities under this Agreement, including, without limitation,
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<PAGE> 34
information concerning the Portfolio, its available funds, or funds that may
reasonably become available for investment, and information as to the general
condition of the Portfolio's affairs, (iv) to provide or cause to be provided to
the Portfolio Advisor on an ongoing basis such information as is reasonably
requested by the Portfolio Advisor for performance by the Portfolio Advisor of
its obligations under this Agreement and the Portfolio Advisor shall not be in
breach of any term of this Agreement or be deemed to have acted negligently if
such alleged breach or negligent act is the result of the Advisor's failure to
provide or cause to be provided such requested information and the Portfolio
Advisor's reliance on the information most recently furnished to the Portfolio
Advisor, and (v)promptly to provide the Portfolio Advisor with any guidelines
and procedures applicable to the Portfolio Advisor or the Portfolio adopted from
time to time by the Board of Trustees of the Trust and all amendments thereto
6. USE OF NAMES. Neither the Advisor nor the Trust shall use the name of
the Portfolio Advisor in any prospectus, sales literature or other material
relating to the Advisor or the Trust in any manner not approved in advance by
the Portfolio Advisor; provided, however, that the Portfolio Advisor will
approve all uses of its name which merely refer in accurate terms to its
appointment hereunder or which are required by the SEC or a state securities
commission; and provided further, that in no event shall such approval be
unreasonably withheld. The Portfolio Advisor shall not use the name of the
Advisor or the Trust in any material relating to the Portfolio Advisor in any
manner not approved in advance by the Advisor or the Trust, as the case may be;
provided, however, that the Advisor and the Trust shall each approve all uses of
their respective names which merely refer in accurate terms to the appointment
of the Portfolio Advisor hereunder or which are required by the SEC or a state
securities commission; and, provided further, that in no event shall such
approval be unreasonably withheld. Upon termination of this Agreement, the
Advisor and the Trust shall immediately cease to use the name of the Portfolio
Advisor.
7. LIMITATION OF LIABILITY OF THE PORTFOLIO ADVISOR. Absent willful
misfeasance, bad faith, gross negligence, or reckless disregard of obligations
or duties hereunder on the part of the Portfolio Advisor, the Portfolio Advisor
shall not be subject to liability to the Advisor, the Trust or to any holder of
an interest in the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security. The Portfolio
Advisor shall not be liable to the Advisor or the Trust for any loss suffered as
a consequence of any action or inaction of other service providers to the Trust,
provided such action or inaction of such other service providers to the
Portfolio is not a result of the willful misconduct, bad faith or gross
negligence in the performance of, or from reckless disregard of, the duties of
the Portfolio Advisor under this Agreement. As used in this Section 7, the term
"Portfolio Advisor" shall include the Portfolio Advisor and/or any of its
affiliates and the directors, officers and employees of the Portfolio Advisor
and/or any of its affiliates.
8. LIMITATION OF TRUST'S LIABILITY. The Portfolio Advisor acknowledges that
it has received notice of and accepts the limitations upon the Trust's liability
set forth in its Declaration
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of Trust. The Portfolio Advisor agrees that (i) the Trust's obligations to the
Portfolio Advisor under this Agreement (or indirectly under the Advisory
Agreement) shall be limited, in any event to the assets of the Portfolio and
(ii) the Portfolio Advisor shall not seek satisfaction of any such obligation
from the holders of interests in the Portfolio nor from any Trustee, officer,
employee or agent of the Trust.
9. FORCE MAJEURE. The Portfolio Advisor shall not be liable for delays or
errors occurring by reason of circumstances beyond its control, including but
not limited to acts of civil or military authority, national emergencies, work
stoppages, fire, flood, catastrophe, acts of God, insurrection, war, riot, or
failure of communication or power supply. In the event of equipment breakdowns
beyond its control, the Portfolio Advisor shall take reasonable steps to
minimize service interruptions but shall have no liability with respect thereto.
10. RENEWAL, TERMINATION AND AMENDMENT.
a. This Agreement shall continue in effect, unless sooner terminated
as hereinafter provided, until December 31, 1998; and it shall continue
thereafter provided that such continuance is specifically approved by the
parties and, in addition, at least annually by (i)the vote of the holders
of a majority of the outstanding voting securities (as herein defined) of
the Portfolio or by vote of a majority of the Trust's Board of Trustees and
(ii) by the vote of a majority of the Trustees who are not parties to this
Agreement or interested persons of either the Advisor or the Portfolio
Advisor, cast in person at a meeting called for the purpose of voting on
such approval.
b. This Agreement may be terminated at any time, without payment of
any penalty, (i) by the Advisor, by the Trust's Board of Trustees or by a
vote of the majority of the outstanding voting securities of the Portfolio,
in any such case upon not less than 60 days' prior written notice to the
Portfolio Advisor and (ii) by the Portfolio Advisor upon not less than 60
days' prior written notice to the Advisor and the Trust. This Agreement
shall terminate automatically in the event of its assignment.
c. If this Agreement is not approved by the favorable vote of a
majority of the outstanding voting securities of the Portfolio during the
120 day period after the effective date of the Agreement, it will terminate
as of the close of business on the last day of such period.
d. This Agreement will also terminate upon written notice to the other
party that the other party is in material breach of the Agreement, unless
the other party in material breach of this Agreement cures such breach to
the reasonable satisfaction of the party alleging the breach within 30 days
after the written notice.
e. 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
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regulations, a vote of the majority of the outstanding voting securities of
the Portfolio affected by such change.
f. The terms "affiliated persons," "assignment," "interested persons"
and "majority of the outstanding voting securities" shall have the meaning
set forth for such terms in Section 2(a) of the 1940 Act.
12. SEVERABILITY AND INCORPORATED EFFECT. If any provision of this
Agreement shall become or shall be found to be invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. In addition, where the effect of a requirement of the 1940 Act
reflected in any provision of this Agreement is relaxed by a rule, regulation or
order of the SEC, whether of specific or general application, such provision
shall be deemed to incorporate the effect of such rule, regulation or order.
13. 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 Portfolio Advisor shall be 345 Park Avenue, New York, New York
10154.
14. MISCELLANEOUS. Each party agrees to perform such further actions and
execute such further documents as are necessary to effectuate the purposes
hereof. This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Ohio, or any applicable provisions of the
1940 Act. To the extent that the laws of the State of Ohio, or any of the
provisions in the Agreement, conflict with applicable provisions of the 1940
Act, the latter shall control. The captions in this Agreement are included for
convenience only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
TOUCHSTONE ADVISORS, INC.
Attest:
BY
- ------------------------------------ ------------------------------
Secretary Edward G. Harness, Jr.
President
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SCUDDER STEVENS & CLARK INC.
Attest:
BY
- ----------------------------------- ------------------------------------
Secretary Name:
---------------------------------
Title:
--------------------------------
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EXHIBIT B
SIMILAR INVESTMENT COMPANIES MANAGED BY SCUDDER
FUNDS, ASSETS AS OF JUNE 30, 1997
AND MANAGEMENT FEE RATES
Scudder Growth and Income Fund
Assets as of 6/30/97 - $5.706 billion
ANNUAL RATE ASSET BREAKOUT
----------- --------------
0.60% first $ 500,000,000
0.55% next $ 500,000,000
0.50% next $ 500,000,000
0.475% next $ 500,000,000
0.45% next $ 1,000,000,000
0.425% next $ 1,500,000,000
0.405% over $ 4,500,000,000
Scudder Variable Life Investment Fund
Growth and Income Portfolio
Assets as of 6/30/97 - $124.6 million
ANNUAL RATE ASSET BREAKOUT
----------- --------------
0.475% all net assets
AARP Investment Program
AARP Growth and Income Fund
Assets as of 6/30/97 - $5.899 billion
Base Fee*
ANNUAL INVESTMENT PROGRAM
RATE ASSET BREAKPOINT
---- ----------------
0.35% first $ 2,000,000,000
0.33% next $ 2,000,000,000
0.30% next $ 2,000,000,000
0.28% next $ 2,000,000,000
0.26% next $ 3,000,000,000
0.25% next $ 3,000,000,000
0.24% over $ 14,000,000,000
Additional
Growth & Income Fund Fee
ANNUAL FUND
RATE ASSET BREAKPOINT
---- ----------------
0.19% all net assets
*Allocated to AARP Growth and Income Fund based on its pro rata share of Program
net assets.
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EXHIBIT C
AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT
SELECT ADVISORS PORTFOLIOS
INVESTMENT ADVISORY AGREEMENT amended and restated as of ________________, 1997,
by and between TOUCHSTONE ADVISORS, INC., an Ohio corporation (the "Advisor"),
and SELECT ADVISORS PORTFOLIOS, a New York master trust created pursuant to a
Declaration of Trust dated February 7, 1994, 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, interests in the Trust are divided into separate subtrusts (each,
along with any subtrust which may in the future be established, a "Portfolio");
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 Advisers Act of 1940, as amended, and desires to provide investment
advisory services to the Trust; and
WHEREAS, pursuant to Section 10c of this Agreement, the Trust and the
Advisor desire to amend the existing Investment Advisory Agreement dated
September 9, 1994, and the amendment thereto dated as of May 1, 1997, to
incorporate the amendment of May 1, 1997 and to reflect an increase in the
advisory fees to be paid by the Growth and Income Portfolio and the Growth and
Income Portfolio II; and
WHEREAS, the required approvals by Board of Trustees of the Trust and the
shareholders of the Trust have been obtained;
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 Portfolio 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.
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2. OBLIGATIONS 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 subadvisors for any Portfolio. Any agreement between
the Advisor and a subadvisor 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:
a) The Advisor will manage the investment and reinvestment of the assets
of each Portfolio, subject to and in accordance with the respective
investment objectives and policies of each Portfolio 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 ("Portfolio Advisor(s)") to make all
determinations with respect to the investment of the assets of each
Portfolio, 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 Portfolio 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 Portfolio Advisor to, render regular reports to the Trust's
Board of Trustees concerning the Trust's and each Portfolio's
investment activities.
b) The Advisor shall, or shall cause the respective Portfolio Advisor(s)
to place orders for the execution of all portfolio transactions, in
the name of the respective Portfolio 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
Portfolio Advisors to create and maintain) all necessary brokerage
records for each Portfolio, 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 Portfolio Advisor) for the
periods and in the places required by Rule 31a-02 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.
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 Portfolio Advisors to
manage, the Portfolio Assets and the investment and reinvestment of
such assets so as to comply with the provisions of the 1940 Act and
with Subchapter M of the Internal Revenue Code of 1986, as amended.
3. 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
Portfolio's auditor's; (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 Portfolios; (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
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<PAGE> 41
and expenses involved in registering and maintaining registrations of the Trust
and/or interests in 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 interest holders 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; (x) the cost of preparing and printing share certificates; and (xi)
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 Portfolio set forth on Schedule 1 attached
hereto (and with respect to any future Portfolio, 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
Portfolio's net assets shall be computed by the same method as the
Trust uses to compute the net asset value of that Portfolio.
b) The Advisor will pay all fees owing to each Portfolio Advisor, and the
Trust shall not be obligated to the Portfolio Advisors in any manner
with respect to the compensation of such Portfolio 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, in consideration of the
Advisor's assumption of certain organization expenses of the Trust and of the
various Portfolios, the Advisor has reserved for itself the rights to the name
"Select Advisors Portfolios" (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.
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<PAGE> 42
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 holder of an interest in any Portfolio for any act or omission
in the course of, or connected with, rendering services hereunder or
for any losses that may be sustained in the purchase, holding or sale
of any security. As used in this Section 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
of its affiliates.
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: (a) the Advisor shall provide security in form and
amount acceptable to the Trust for its undertaking; (b) the Trust is
insured against losses arising by reason of the advance; or (c) a
majority of a quorum of the Trustees of the Trust, the members of
which majority are disinterested non-party Trustees, or independent
legal counsel in a written opinion, shall have determined, based on a
review of facts readily available to the Trust at the time the advance
is proposed to be made, that there is reason to believe that the
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 interests in any Portfolio 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.
10. RENEWAL, TERMINATION AND AMENDMENT.
a) This Agreement shall continue in effect, unless sooner terminated as
hereinafter provided, for a period of twelve months from the date
hereof and it shall continue indefinitely thereafter as to each
Portfolio, 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 Portfolio or by vote of a majority of the Trust's Board of
Trustees and (ii) by the vote of a majority of the Trustees who are
not parties to this Agreement or interested
39
<PAGE> 43
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
Portfolio(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 Portfolio(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 Portfolio 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered inn 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 February 7, 1994, the
obligations of this Agreement are not binding upon any of the Trustees or
interestholders of the Trust individually, but bind only the Trust estate.
SELECT ADVISORS PORTFOLIOS
By
-----------------------------------------
Edward G. Harness, Jr., President
TOUCHSTONE ADVISORS, INC.
By
-----------------------------------------
Brian J. Manley, Vice President
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<PAGE> 44
AMENDED AND RESTATED INVESTMENT ADVISORY AGREEMENT
BETWEEN SELECT ADVISORS PORTFOLIOS AND TOUCHSTONE ADVISORS, INC.
SCHEDULE 1
Emerging Growth Portfolio 0.80%
International Equity Portfolio 0.95%
Growth & Income Portfolio 0.80% of the first $150
million of the average daily
net assets of the Portfolio;
and 0.75% of average daily
net assets of the Portfolio
in excess of $150 million.
Growth & Income Portfolio II 0.80% of the first $150
million of the average daily
net assets of the Portfolio;
and 0.75% of average daily
net assets of the Portfolio
in excess of $150 million.
Balanced Portfolio 0.80%
Income Opportunity 0.65%
Bond Portfolio 0.55%
Bond Portfolio II 0.55%
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<PAGE> 45
TOUCHSTONE GROWTH & INCOME FUND A
(A SEPARATE SERIES OF SELECT ADVISORS TRUST A)
AND
TOUCHSTONE GROWTH & INCOME FUND C
(A SEPARATE SERIES OF SELECT ADVISORS TRUST C)
THIS SOLICITATION IS MADE ON BEHALF OF THE TRUSTEES OF
SELECT ADVISORS TRUST A AND SELECT ADVISORS TRUST C, RESPECTIVELY
The undersigned appoints Edward G. Harness, Jr. and Edward S. Heenan and
each of them, with full power of substitution, as attorneys and proxies of the
undersigned, and does thereby request that the votes attributable to the
undersigned be cast at the Meeting of Shareholders of the Touchstone Growth &
Income Fund A (a separate series of Select Advisors Trust A (a "Trust")) and
Touchstone Growth & Income Fund C (a separate series of Select Advisors Trust C
(a "Trust")) to be held at 10:30 a.m. on September 18, 1997 at the offices of
the Trusts, 311 Pike Street, Cincinnati, Ohio, and at any adjournment thereof.
If a proxy is not received from a particular shareholder, then the votes
attributable to him or her will be allocated in the same ratio as votes for
which instructions have been received.
- --------------------------------------------------------------------------------
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BELOW, OR IF NO
DIRECTION IS INDICATED, WILL BE VOTED FOR THE PROPOSAL BELOW.
THE BOARD OF TRUSTEES OF EACH TRUST RECOMMENDS A VOTE FOR THE PROPOSAL.
PLEASE VOTE BY CHECKING YOUR RESPONSE.
<TABLE>
<CAPTION>
<S> <C>
1. Approval of Current Portfolio Sub-Advisory FOR [ ] AGAINST [ ] ABSTAIN [ ]
Agreement between Touchstone Advisors, Inc.
(the "Advisor") and Scudder, Stevens and
Clark, Inc. ("Scudder").
2. Approval of New Portfolio Sub-Advisory FOR [ ] AGAINST [ ] ABSTAIN [ ]
Agreement between the Advisor and Scudder (or
its successor).
3. Approval of Amendment to the Investment FOR [ ] AGAINST [ ] ABSTAIN [ ]
Advisory Agreement between the Portfolio
Trust and the Advisor.
4. Approval of amendment to the Portfolio's FOR [ ] AGAINST [ ] ABSTAIN [ ]
fundamental investment restriction relating
to investments in real estate.
TOTAL SHARES ATTRIBUTABLE TO THE UNDERSIGNED: ______
NOTE: THE UNDERSIGNED HEREBY
ACKNOWLEDGES RECEIPT OF THE
NOTICE OF MEETING AND PROXY
STATEMENT AND REVOKES ANY
PLEASE VOTE, DATE, SIGN EXACTLY AS YOUR NAME PROXY HERETOFORE GIVEN WITH
APPEARS ON THIS CARD, AND RETURN THIS FORM IN RESPECT TO THE VOTES COVERED
THE ENCLOSED SELF-ADDRESSED ENVELOPE. BY THIS PROXY.
</TABLE>
Dated: , 1997
---------------------------- ----------------------------------
Signature
----------------------------------
Signature If Jointly Held
