<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 30, 1998
File Nos. 33-76566 and 811-8416
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 7
AND
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 8
SELECT ADVISORS VARIABLE INSURANCE TRUST
(Exact Name of Registrant as Specified in Charter)
311 PIKE STREET, CINCINNATI, OHIO
45202
(Address of Principal Executive Offices)
(Zip Code)
Registrant's Telephone Number, including Area Code: (513) 361-7900
ANDREW S. JOSEF
INVESTORS BANK & TRUST COMPANY
200 CLARENDON STREET, BOSTON, MASSACHUSETTS 02116
(Name and Address of Agent for Service)
copies to:
J. Leland Brewster, Esq. Edward G. Harness, Jr.
Frost & Jacobs LLP Touchstone Securities, Inc.
2500 East 5th Street 311 Pike Street
P.O. Box 5715 Cincinnati, Ohio 45202
Cincinnati, Ohio 45201-5715
It is proposed that this filing will become effective (check appropriate box)
[X] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Title of Securities Being Registered: Shares of Beneficial Interest
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SELECT ADVISORS VARIABLE INSURANCE TRUST
FORM N-1A
CROSS REFERENCE SHEET
Part A
ITEM NO. HEADINGS IN PROSPECTUS
1. Cover Page ...................................... Cover Page
2. Synopsis ........................................ Not applicable
3. Condensed Financial Information ................. Financial Highlights
4. General Description of Registrant ............... Cover Page; Investment
Objectives, Policies and
Risks; Advisor and
Portfolio Advisors;
Management of the Trust
5. Management of the Funds ......................... Advisor and Portfolio
Advisors; Management of
the Trust
5A. Management's Discussion of Fund
Performance .................................. Not applicable
6. Capital Stock and Other Securities .............. Cover Page; Purchase of
Shares; Redemption of
Shares; Dividends,
Distributions and Taxes;
Management of the Trust;
Performance Information;
Additional Information
7. Purchase of Securities Being Offered ............ Purchase of Shares; Net
Asset Value
8. Redemption or Repurchase ........................ Redemption of Shares;
Net Asset Value
9. Pending Legal Proceedings ....................... Not applicable
Part B HEADINGS IN STATEMENT OF
ITEM NO. ADDITIONAL INFORMATION
10. Cover Page ..................................... Cover Page
11. Table of Contents .............................. Table of Contents
12. General Information and History ................ Not applicable
13. Investment Objectives and Policies ............. Investment Objectives,
Policies, Restrictions
and Risks
14. Management of the Fund ......................... Management of the Trust
15. Control Persons and Principal .................. Management of the Trust;
Holders of Securities Organization of the Trust
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16. Investment Advisory and Other Services ......... Management of the Trust
17. Brokerage Allocation and Other ................. Investment Objectives,
Practices Policies and Restrictions
18. Capital Stock and Other Securities ............. Organization of the Trust;
(see also Prospectus --
"Dividends, Distributions
and Taxes")
19. Purchase, Redemption and Pricing of ............ Valuation of Securities;
Securities Being Offered Redemption in Kind
20. Tax Status ..................................... Taxes (see also
Prospectus -- "Dividends,
Distributions and Taxes")
21. Underwriters ................................... Not applicable
22. Calculations of Performance Information ........ Performance Information
23. Financial Statements ........................... Financial Statements
PART C
Information required to be included in Part C is set forth under the appropriate
item, so numbered, in Part C of this Registration Statement.
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EXPLANATORY NOTE
This Post-Effective Amendment to the Registration Statement on Form N-1A of
Select Advisors Variable Insurance Trust (the "Trust") (File Nos. 33-76566 and
811-8416) is being filed pursuant to Rule 485(b) of the Securities Act of 1933
in order to electronically file certain exhibits to the Trust's Registration
Statement which have previously been filed with the Securities and Exchange
Commission in paper form. The prospectus and statement of additional information
of the Trust have not changed and are incorporated by reference herein.
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PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS INCLUDED IN PART A
FOR THE REGISTRANT (except for Touchstone Value Plus Portfolio):
Financial Highlights
FINANCIAL STATEMENTS INCLUDED IN PART B
FOR THE REGISTRANT (except for Touchstone Value Plus Portfolio):
Schedule of Investments, December 31, 1997
Statement of Assets and Liabilities, December 31, 1997
Statement of Operations, for the year ended December 31, 1997
Statement of Changes in Net Assets, for the years ended
December 31, 1997 and December 31, 1996
Financial Highlights
Notes to Financial Statements
Report of Independent Accountants
(b) EXHIBITS:
(1A) Amended Declaration of Trust of the Trust.(1)
(1B) Amendment to the Amended Declaration of Trust of the Trust.(3)
(2) Amended By-Laws of the Trust.(1)
(3) Inapplicable.
(4) Inapplicable.
(5A) Amended and Restated Investment Advisory Agreement.(3)
(5B) Form of Portfolio Advisory Agreement with respect to Value Plus
Portfolio.(4)
(5C) Portfolio Advisory Agreements with respect to Emerging Growth
Portfolio.(1)
(5D) Portfolio Advisory Agreement with respect to International Equity
Portfolio.(1)
(5E) Form of Portfolio Advisory Agreement with respect to Balanced
Portfolio.(3)
(5F) Portfolio Advisory Agreement with respect to Income Opportunity
Portfolio.(1)
(5G) Portfolio Advisory Agreement with respect to Standby Income Portfolio.(1)
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(6) Inapplicable.
(7) Inapplicable.
(8) Custodian Agreement.(5)
(9A) Administration Agreement.(2)
(9B) Sponsor Agreement.(5)
(9C) Transfer Agency Agreement.(2)
(9D) Fund Accounting Agreement.(2)
(10) Opinion of counsel.(5)
(11) Consent of independent accountants.(4)
(12) Inapplicable.
(13) Investment letter of initial shareholders.(5)
(14) Inapplicable.
(15) Inapplicable.
(16) Method of computation of performance information.(5)
(17) Inapplicable.
(27) Financial Data Schedules.(4)
(1) Incorporated by reference from Post-Effective Amendment No. 2 to the
Registration Statement as filed with the SEC via Edgar on April 29, 1996.
(2) Incorporated by reference from Post-Effective Amendment No. 3 to the
Registration Statement as filed with the SEC via Edgar on February 28,
1997.
(3) Incorporated by reference from Post-Effective Amendment No. 5 to the
Registration Statement as filed with the SEC via Edgar on February 13,
1998.
(4) Incorporated by reference from Post-Effective Amendment No. 6 to the
Registration Statement as filed with the SEC via Edgar on April 28, 1998.
(5) Filed herein.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE TRUST.
Inapplicable.
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ITEM 26. NUMBER OF HOLDERS OF SECURITIES.
TITLE OF CLASS NUMBER OF RECORD HOLDERS
(as of June 30, 1998)
Emerging Growth Portfolio 3
International Equity Portfolio 3
Balanced Portfolio 3
Income Opportunity Portfolio 3
Value Plus Portfolio 3
Standby Income Portfolio 3
ITEM 27. INDEMNIFICATION.
Under Article V, Section 5.3 of the Trust's Declaration of Trust, (a) subject to
the exceptions and limitations contained in paragraph (b) below: (i) every
person who is or has been a Trustee or officer of the Trust shall be indemnified
by the Trust, to the fullest extent permitted by law (including the 1940 Act) as
currently in effect or as hereinafter amended, against all liability and against
all expenses reasonably incurred or paid by him in connection with any claim,
action, suit or proceeding in which he becomes involved as a party or otherwise
by virtue of his being or having been a Trustee or officer and against amounts
paid or incurred by him in the settlement thereof; (ii) the words "claim",
"action", "suit", or "proceeding" shall apply to all claims, actions, suits or
proceedings (civil, criminal, administrative or other, including appeals),
actual or threatened; and the words "liability" and "expenses" shall include,
without limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities. (b) No indemnification shall
be provided hereunder to a Trustee or officer: (i) against any liability to the
Trust or the Shareholders by reason of a final adjudication by the court or
other body before which the proceeding was brought that he engaged in wilful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office; (ii) with respect to any matter as to
which he shall have been finally adjudicated not to have acted in good faith in
the reasonable belief that his action was in the best interest of the Trust; or
(iii) in the event of a settlement involving a payment by a Trustee or officer
or other disposition not involving a final adjudication as provided in paragraph
(b)(i) or (b)(ii) above resulting in a payment by a Trustee or officer, unless
there has been either a determination that such Trustee or officer did not
engage in wilful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his office by the court or other body
approving the settlement or other disposition or by a reasonable determination,
based upon a review of readily available facts (as opposed to a full trial-type
inquiry) that he did not engage in such conduct: (A) by a vote of a majority of
the Disinterested Trustees acting on the matter (provided that a majority of the
Disinterested Trustees then in office act on the matter); or (B) by written
opinion of independent legal counsel. (c) Subject to the provisions of the 1940
Act, the Trust may maintain insurance for the protection of the Trust Property,
its present or former Shareholders, Trustees, officers, employees, independent
contractors and agents in such amount as the Trustees shall deem adequate to
cover possible tort liability (whether or not the Trust would have the power to
indemnify such Persons against such liability), and such other insurance as the
Trustees in their sole judgment
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shall deem advisable. (d) The rights of indemnification herein provided shall be
severable, shall not affect any other rights to which any Trustee or officer may
now or hereafter be entitled, shall continue as to a Person who has ceased to be
such a Trustee or officer and shall inure to the benefit of the heirs, executors
and administrators of such Person. Nothing contained herein shall affect any
rights to indemnification to which personnel other than Trustees and officers
may be entitled by contract or otherwise under law. (e) Expenses of preparation
and presentation of a defense to any claim, action, suit, or proceeding of the
character described in paragraph (a) of this Section 5.3 shall be advanced by
the Trust prior to final disposition thereof upon receipt of an undertaking by
or on behalf of the recipient to repay such amount if it is ultimately
determined that he is not entitled to indemnification under this Section 5.3,
provided that either: (I) such undertaking is secured by a surety bond or some
other appropriate security or the Trust shall be insured against losses arising
out of any such advances; or (ii) a majority of the Disinterested Trustees
acting on the matter (provided that a majority of the Disinterested Trustees
then in office act on the matter) or an independent legal counsel in a written
opinion, shall determine, based upon a review of readily available facts (as
opposed to a full trial-type inquiry), that there is reason to believe that the
recipient ultimately will be found entitled to indemnification. As used in this
Section 5.3 a "Disinterested Trustee" is one (i) who is not an "Interested
Person" of the Trust (including anyone who has been exempted from being an
"Interested Person" by any rule, regulation or order of the Commission), and
(ii) against whom none of such actions, suits or other proceedings or another
action, suit or other proceeding on the same or similar grounds is then or had
been pending. As used in this Section 5.3, the term "independent legal counsel"
means an attorney who is independent in all respects from the Trust and from the
person or persons who seek indemnification hereunder and in any event means an
attorney who has not been retained by or performed services for the Trust or any
person to be so indemnified within the five years prior to the Initial request
for indemnification pursuant hereto.
Insofar as indemnification for liability arising under the Securities Act of
1933, as amended (the "1933 Act"), may be permitted to Trustees, officers and
controlling persons of the Trust pursuant to the foregoing provisions, or
otherwise, the Trust has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Trust of expenses incurred or paid by a Trustee, officer
or controlling person of the Trust in the successful defense of any action, suit
or proceeding) is asserted by such Trustee, officer or controlling person in
connection with the securities being registered, the Trust will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the 1933 Act and
will be governed by the final adjudication of such issue.
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ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISOR.
Touchstone Advisors, Inc. ("Touchstone Advisors") serves as investment
advisor to each series of the Trust.
Set forth below are the names, principal business addresses and positions
of each director and officer of Touchstone Advisors. Unless otherwise
noted, the principal business address of these individuals is Touchstone
Advisors, Inc., 311 Pike Street, Cincinnati, Ohio 45202. Unless otherwise
specified, none of the officers and directors of Touchstone Advisors serve
as officers and Trustees of the Trust.
POSITIONS AND OFFICES
WITH TOUCHSTONE POSITION AND OFFICES
NAME ADVISERS WITH THE REGISTRANT
James N. Clark* Director none
Edward G. Harness, Jr. Director, President Chairman of the Board,
and Chief Executive President and Chief
Officer Executive Officer
William F. Ledwin* Director none
Donald J. Wuebbling* Director, Secretary
and Chief Legal Officer none
James J. Vance* Treasurer Treasurer
Edward S. Heenan* Vice President Controller
and Controller
J. Thomas Lancaster* Vice President and
Treasurer none
Richard K. Taulbee* Vice President none
Patricia Wilson Chief Compliance Officer none
Robert F. Morand* Assistant Secretary none
Robert A. Dressman* Assistant Treasurer none
Timothy D. Speed* Assistant Treasurer none
*Principal business address is 400 Broadway, Cincinnati, Ohio 45202
ITEM 29. PRINCIPAL UNDERWRITERS.
Inapplicable.
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Item 30. LOCATION OF ACCOUNTS AND RECORDS.
Select Advisors Variable Insurance Trust
311 Pike Street
Cincinnati, OH 45202
Touchstone Advisors, Inc.
311 Pike Street
Cincinnati, OH 45202
(investment advisor)
Investors Bank & Trust Company
200 Clarendon Street
Boston, MA 02116
(administrator and fund accounting agent)
ITEM 31. MANAGEMENT SERVICES.
Inapplicable.
ITEM 32. UNDERTAKINGS.
(a) Not applicable.
(b) Not applicable.
(c) If the information called for by Item 5A of Form N-1A is contained in the
latest annual report to shareholders, the Registrant shall furnish each
person to whom a prospectus is delivered with a copy of the Registrant's
latest annual report to shareholders upon request and without charge.
(d) The Registrant undertakes to comply with Section 16(c) of the 1940 Act.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, as amended, the Registrant has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereto
duly authorized, in the City of Boston and the Commonwealth of Massachusetts on
the 28th day of July, 1998.
SELECT ADVISORS VARIABLE INSURANCE TRUST
By: /s/ ANDREW S. JOSEF
----------------------------------------
Andrew S. Josef, Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on July 28, 1998.
SIGNATURE TITLE
/s/ EDWARD G. HARNESS, JR.* President and Trustee
- -------------------------------
Edward G. Harness, Jr.
/s/ WILLIAM J. WILLIAMS* Trustee
- -------------------------------
William J. Williams
/s/JOSEPH S. STERN, JR.* Trustee
- -------------------------------
Joseph S. Stern, Jr.
/s/ PHILLIP R. COX* Trustee
- -------------------------------
Phillip R. Cox
/s/ ROBERT E. STAUTBERG* Trustee
- -------------------------------
Robert E. Stautberg
/s/ DAVID POLLAK* Trustee
- -------------------------------
David Pollak
/s/ JAMES J. VANCE* Treasurer (Principal Financial
- ------------------------------- Officer and Principal Accounting
James J. Vance Officer)
* By /s/ ANDREW S. JOSEF
--------------------------
Andrew S. Josef, as
Attorney-in-fact
(pursuant to powers of
attorney filed herewith).
<PAGE> 12
SELECT ADVISORS VARIABLE INSURANCE TRUST
EXHIBITS TO
REGISTRATION STATEMENT ON
FORM N-1A
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
(8) Custodian Agreement
(9B) Sponsor Agreement
(10) Opinion of counsel
(13) Investment letter of initial shareholders
(16) Method of computation of performance information
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Exhibit (8)
CUSTODIAN AGREEMENT
BETWEEN
SELECT ADVISORS VARIABLE INSURANCE TRUST
AND
INVESTORS BANK & TRUST COMPANY
<PAGE> 2
TABLE OF CONTENTS
Page
----
1. Bank Appointed Custodian.............................................. 1
2. Definitions........................................................... 1
2.1 Authorized Person.............................................. 1
2.2 Security....................................................... 1
2.3 Portfolio Security............................................. 2
2.4 Officers' Certificate.......................................... 2
2.5 Book Entry System.............................................. 2
2.6 Depository..................................................... 2
2.7 Proper Instructions............................................ 2
3. Separate Accounts..................................................... 3
4. Certification as to Authorized Persons................................ 3
5. Custody of Cash....................................................... 3
5.1 Purchase of Securities......................................... 4
5.2 Redemptions.................................................... 4
5.3 Distributions and Expenses of Each Portfolio................... 4
5.4 Payment in Respect of Securities............................... 5
5.5 Repayment of Loans............................................. 5
5.6 Repayment of Cash.............................................. 5
5.7 Foreign Exchange Transactions.................................. 5
5.8 Other Authorized Payments...................................... 5
5.9 Termination.................................................... 6
6. Securities............................................................ 6
6.1 Segregation and Registration................................... 6
6.2 Voting and Proxies............................................. 6
6.3 Book-Entry System.............................................. 7
6.4 Use of a Depository............................................ 8
6.5 Use of a Book-Entry System for Commercial Paper................ 10
6.6 Use of Immobilization Programs................................. 11
6.7 Eurodollar CDs................................................. 11
6.8 Options and Futures Transactions............................... 11
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(a) Puts and Calls Traded on Securities
Exchanges, NASDAQ or Over-the-Counter................... 11
(b) Puts, Calls and Futures Traded on
Commodities Exchanges................................... 12
6.9 Segregated Account............................................. 13
6.10 Interest Bearing Call or Time Deposits......................... 14
6.11 Transfer of Securities......................................... 15
7. Redemptions........................................................... 17
8. Merger, Dissolution, etc. of a Portfolio.............................. 17
9. Actions of Bank Without Prior Authorization........................... 18
10. Collection; Defaults.................................................. 19
11. Maintenance of Records................................................ 19
12. Portfolio Evaluation.................................................. 20
13. Concerning the Bank................................................... 20
13.1 Performance of Duties; Standard of Care........................ 20
13.2 Agents and Subcustodians....................................... 22
13.3 Insurance...................................................... 22
13.4 Fees and Expenses of Bank...................................... 22
13.5 Advances by Bank............................................... 23
14. Termination........................................................... 23
15. Confidentiality....................................................... 24
16. Notices............................................................... 25
17. Amendments............................................................ 25
18. Parties............................................................... 25
19. Governing Law......................................................... 25
20. Limitations of Liability.............................................. 25
21. Counterparts.......................................................... 25
<PAGE> 4
CUSTODIAN AGREEMENT
AGREEMENT made as of this 22nd day of August, 1994, between Select
Advisors Variable Insurance Trust, a Massachusetts business trust (the "Trust"),
acting for and on behalf of each of the separate series of the Trust currently
existing or existing in the future and the portfolio of cash, securities, and
other assets held by each such series (each a "Portfolio" or, together, the
"Portfolios"), and INVESTORS BANK & TRUST COMPANY, (the "Bank").
The Trust, each of whose Portfolios is an open-end management investment
company, desires to place and maintain the securities and cash of each of the
Portfolios in the custody of the Bank. The Bank has at least the minimum
qualifications required by Section 17(f)(1) of the Investment Company Act of
1940 (the "Act") to act as custodian of the securities and cash of the
Portfolios, and has indicated its willingness to so act, subject to the terms
and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained herein, the parties hereto agree as follows:
1. BANK APPOINTED CUSTODIAN. The Trust hereby appoints the Bank as
custodian of its portfolio securities and cash delivered to the Bank as
hereinafter described and the Bank agrees to act as such upon the terms and
conditions hereinafter set forth.
2. DEFINITIONS. Whenever used herein, the terms listed below will have
the following meaning:
2.1 AUTHORIZED PERSON. Authorized Person will mean any of the
persons duly authorized to give Proper Instructions or otherwise act on
behalf of the Trust or any of its Portfolios by appropriate resolution of
its Board of Trustees (the "Board"), and set forth in a certificate as
required by Section 4 hereof, subject in any case to such limitations on
the authority of any such person as are set forth in the Officers'
Certificate.
2.2 SECURITY. The term security as used herein will have the same
meaning as when such term is used in the Securities Act of 1933 as
amended, including, without limitation, any note, stock, treasury stock,
bond, debenture, evidence of indebtedness, certificate of interest or
participation in any profit sharing agreement, collateral-trust
certificate, preorganization certificate of subscription, transferable
share, investment contract, voting-trust certificate, certificate of
deposit for a security, fractional undivided interest in oil, gas, or
other mineral rights, any put, call, straddle, option, or privilege on any
security, certificate of deposit, or group or index of securities
(including any interest therein or based on the value thereof), or any
put, call, straddle, option, or privilege entered into on a national
securities exchange relating to a foreign currency, or, in general, any
interest or instrument commonly known as a "security", or any certificate
of
<PAGE> 5
interest or participation in, temporary or interim certificate for,
receipt for, guarantee of, or warrant or right to subscribe to, or option
contract to purchase or sell any of the foregoing and futures, forward
contracts and options thereon.
2.3 PORTFOLIO SECURITY. Portfolio Security will mean any Security
owned by a Portfolio.
2.4 OFFICERS' CERTIFICATE. Officers' Certificate will mean, unless
otherwise indicated, any request, direction, instruction, or certification
in writing signed by any two Authorized Persons of the Trust.
2.5 BOOK-ENTRY SYSTEM. Book-Entry System shall mean the Federal
Reserve-Treasury Department Book Entry System for United States
government, instrumentality and agency securities operated by the Federal
Reserve Bank, its successor or successors and its nominee or nominees.
2.6 DEPOSITORY. Depository shall mean The Depository Trust Company
("DTC"), a clearing agency registered with the Securities and Exchange
Commission under Section 17A of the Securities Exchange Act of 1934, its
successor or successors and its nominee or nominees. The term "Depository"
shall further mean and include any other person authorized to act as a
depository under the Act, its successor or successors and its nominee or
nominees, specifically identified in a certified copy of a resolution of
the Board.
2.7 PROPER INSTRUCTIONS. Proper Instructions shall mean (i)
instructions (which may be continuing instructions) regarding the purchase
or sale of Portfolio Securities, and payments and deliveries in connection
therewith, given by an Authorized Person, such instructions to be given in
such form and manner as the Bank and the Trust shall agree upon from time
to time, (ii) instructions (which may be continuing instructions)
regarding other matters signed or initialed by such one or more Authorized
Persons and (iii) instructions contained in an Officers' Certificate. Oral
instructions will be considered Proper Instructions if the Bank reasonably
believes them to have been given by an Authorized Person who has been
granted authority with respect to the transaction involved. The Trust
shall cause all oral instructions to be promptly confirmed in writing. The
Bank shall act upon and comply with any subsequent Proper Instruction
which modifies a prior instruction, and the sole obligation of the Bank
with respect to any follow-up or confirmatory instruction shall be to make
reasonable efforts to detect any discrepancy between the original
instruction and such confirmation and to report such discrepancy to the
Trust. The Trust shall be responsible, at the Trust's expense, for taking
any action, including any reprocessing, necessary to correct any such
discrepancy or error, and to the extent such action requires the Bank to
act the Trust shall give the Bank specific Proper Instructions as to the
action required. Upon receipt of an Officers' Certificate as to the
authorization by the Board, accompanied by a detailed description of
procedures approved by the Trust, Proper Instructions may include
communication effected directly between electro-mechanical or electronic
devices provided that the
2
<PAGE> 6
Board and the Bank are satisfied that such procedures afford adequate
safeguards for the Trust's assets.
3. SEPARATE ACCOUNTS. Because the Trust has more than one Portfolio,
the Bank will segregate the assets of each Portfolio to which this Agreement
relates into a separate account for each such Portfolio containing the assets of
such Portfolio (and all investment earnings thereon).
4. CERTIFICATE AS TO AUTHORIZED PERSONS. The Secretary or Assistant
Secretary of the Trust will at all times maintain on file with the Bank his
certification to the Bank, in such form as may be acceptable to the Bank, of (i)
the names and signatures of the Authorized Persons and (ii) the names of the
members of the Board, it being understood that upon the occurrence of any change
in the information set forth in the most recent certification on file (including
without limitation any person named in the most recent certification who is no
longer an Authorized Person as designated therein), the Secretary or Assistant
Secretary of the Trust will sign a new or amended certification setting forth
the change and the new, additional or omitted names or signatures. The Bank will
be entitled to rely and act upon an Officers' Certificate given to it by the
Trust which has been signed by Authorized Persons named in the most recent
certification.
5. CUSTODY OF CASH. As custodian for the Trust, the Bank will open and
maintain a separate account or accounts in the name of the Trust or in the name
of the Bank, as Custodian of each of the Portfolios of the Trust, and will
deposit to the account of each Portfolio all of the cash of the Portfolio,
except for cash held by a subcustodian appointed pursuant to Section 13.2
hereof, including borrowed funds, delivered to the Bank, subject only to draft
or order by the Bank acting pursuant to the terms of this Agreement. Upon
receipt by the Bank of Proper Instructions (which may be continuing
instructions) or in the case of payments for redemptions and repurchases of
outstanding interests of each Portfolio of the Trust, notification from the
Trust's transfer agent as provided in Section 7, which in either case requests
such payment, designates the payee or the account or accounts to which the Bank
will release funds for deposit, and states that it is for a purpose permitted
under the terms of this Section 5, specifying the applicable subsection, or
describing such purpose with sufficient particularity to permit the Bank to
ascertain the applicable subsection, the Bank will make payments of cash held
for the accounts of the Trust, insofar as funds are available for that purpose,
in the following circumstances:
5.1 PURCHASE OF SECURITIES: upon the purchase of securities for
any Portfolio of the Trust, against contemporaneous receipt of such
securities by the Bank or against delivery of such securities to the Bank
in accordance with generally accepted settlement practices and customs in
the jurisdiction or market in which the transaction occurs, registered in
the name of the Portfolio or in the name of, or properly endorsed and in
form for transfer to, the Bank, or a nominee of the Bank, or receipt for
the account of the Bank pursuant to the provisions of Section 6 below,
each payment to be made at the purchase price shown on a broker's
confirmation (or transaction report in the case of Book Entry Paper) of
3
<PAGE> 7
purchase of the securities received by the Bank before such payment is
made, as confirmed in the Proper Instructions received by the Bank before
such payment is made;
5.2 REDEMPTIONS: in such amount as may be necessary for the
repurchase or redemption of interests of any Portfolio of the Trust
offered for repurchase or redemption in accordance with Section 7 of this
Agreement;
5.3 DISTRIBUTIONS AND EXPENSES OF EACH PORTFOLIO: for the payment
on the account of any Portfolio of the Trust of dividends or other
distributions to shareholders as may from time to time be declared by the
Board, of interest, taxes, management or supervisory fees, distribution
fees, fees of the Bank for its services hereunder and reimbursement of the
expenses and liabilities of the Bank as provided hereunder, of fees of any
transfer agent, fees for legal, accounting, and auditing services, or
other operating expenses of any Portfolio of the Trust;
5.4 PAYMENT IN RESPECT OF SECURITIES: for payments in connection
with the conversion, exchange or surrender of Portfolio Securities or
securities subscribed to by any Portfolio of the Trust held by or to be
delivered to the Bank;
5.5 REPAYMENT OF LOANS: to repay loans of money made to any
Portfolio of the Trust, but, in the case of final payment, only upon
redelivery to the Bank of any Portfolio Securities pledged or hypothecated
therefor and upon surrender of documents evidencing the loan;
5.6 REPAYMENT OF CASH: to repay the cash delivered to any
Portfolio of the Trust for the purpose of collateralizing the obligation
to return to the Portfolio certificates borrowed from the Portfolio
representing Portfolio Securities, but only upon redelivery to the Bank of
such borrowed certificates;
5.7 FOREIGN EXCHANGE TRANSACTIONS: for payments in connection with
foreign exchange contracts or options to purchase and sell foreign
currencies for spot and future delivery which may be entered into by the
Bank on behalf of any Portfolio of the Trust upon the receipt of Proper
Instructions, such Proper Instructions to specify the currency broker or
banking institution (which may be the Bank, or any other subcustodian or
agent hereunder, acting as principal) with which the contract or option is
made, and the Bank shall have no duty with respect to the selection of
such currency brokers or banking institutions with which the Portfolio
deals or for their failure to comply with the terms of any contract or
option;
5.8 OTHER AUTHORIZED PAYMENTS: for other authorized transactions
of any Portfolio of the Trust, or other obligations thereof, incurred for
proper Portfolio purposes; provided that before making any such payment
the Bank will also receive a certified copy of a resolution of the Board
signed by an Authorized Person (other than the Person certifying such
resolution) and certified by its Secretary or Assistant Secretary, naming
the person or persons to whom such payment is to be made, and either
describing the transaction for
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which payment is to be made and declaring it to be an authorized
transaction of the Portfolio, or specifying the amount of the obligation
for which payment is to be made, setting forth the purpose for which such
obligation was incurred and declaring such purpose to be a proper
corporate purpose; and
5.9 TERMINATION: upon the termination of this Agreement as
hereinafter set forth pursuant to Section 8 and Section 14 of this
Agreement.
6. SECURITIES
6.1 SEGREGATION AND REGISTRATION. Except as otherwise provided
herein, and except for securities to be delivered to any subcustodian
appointed pursuant to Section 13.2 hereof, the Bank as custodian, will
receive and hold pursuant to the provisions hereof, in a separate account
of accounts and physically segregated at all times from those of other
persons, any and all Portfolio Securities which may now or hereafter be
delivered to it by or for the account of any Portfolio of the Trust. All
such Portfolio Securities will be held of disposed of by the Bank for, and
subject at all times to, the instructions of the Portfolio pursuant to the
terms of this Agreement. Subject to the specific provisions herein
relating to Portfolio Securities that are not physically held by the Bank,
the Bank will register all Portfolio Securities (unless otherwise directed
by Proper Instructions or an Officers' Certificate), in the name of a
registered nominee of the Bank as defined in the Internal Revenue Code and
any Regulations of the Treasury Department issued thereunder, and will
execute and deliver all such certificates in connection therewith as may
be required by such laws or regulations or under the laws of any State.
The Bank will use its best efforts to the end that the specific Portfolio
Securities held by it hereunder will be at all times identifiable.
The Trust will from time to time furnish to the Bank appropriate
instruments to enable it to hold or deliver in proper form for transfer,
or to register in the name of its registered nominee, any Portfolio
Securities which may from time to time be registered in the name of any
Portfolio of the Trust.
6.2 VOTING AND PROXIES. Neither the Bank nor any nominee of the
Bank will vote any of the Portfolio Securities held hereunder, except in
accordance with Proper Instructions. The Bank will promptly execute and
deliver, or cause to be executed and delivered, to the Trust all notices,
proxies and proxy soliciting materials with respect to such Securities,
such proxies to be executed by the registered holder of such Securities,
(if registered otherwise than in the name of a Portfolio of the Trust),
but without indicating the manner in which such proxies are to be voted.
6.3 BOOK-ENTRY SYSTEM. Provided (i) the Bank has received a
certified copy of a resolution of the Board specifically approving
deposits of any Portfolio of the Trust's assets in the Book-Entry System,
and (ii) for each year following such approval, the Board has reviewed and
approved the arrangement and has not delivered an Officer's Certificate to
the Bank indicating that the Board has withdrawn its approval.
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(a) The Bank may keep Portfolio Securities in the Book-Entry
System provided that such Portfolio Securities are represented in an
account ("Account") of the Bank (or its agent) in such System which
shall not include any assets of the Bank (or such agent) other than
assets held as a fiduciary, custodian, or otherwise for customers.
(b) The records of the Bank (and any such agent) with
respect to any Portfolio of the Trust's participation in the
Book-Entry System through the Bank (or any such agent) will identify
by book entry Portfolio Securities which are included with other
securities deposited in the Account and shall at all times during
the regular business hours of the Bank (or such agent) be open for
inspection by duly authorized officers, employees or agents of the
Trust. Where securities are transferred to any Portfolio of the
Trust's account, the Bank shall also, by book entry or otherwise,
identify as belonging to the Portfolio a quantity of securities in
fungible bulk of securities (i) registered in the name of the Bank
or its nominee, or (ii) shown on the Bank's account on the books of
the Federal Reserve Bank.
(c) The Bank (or its agent) shall pay for Portfolio
Securities purchased for the account of any Portfolio of the Trust
or shall pay cash collateral against the return of securities loaned
by any Portfolio of the Trust upon (i) receipt of advice from the
Book-Entry System that such Securities have been transferred to the
Account, and (ii) the making of an entry on the records of the Bank
(or its agent) to reflect such payment and transfer for the account
of the Portfolio. The Bank (or its agent) shall transfer securities
sold or loaned for the account of any Portfolio of the Trust upon
(i) receipt of advice from the Book-Entry System that
payment for securities sold or payment of the initial cash
collateral against the delivery of securities loaned by the
Portfolio has been transferred to the Account, and
(ii) the making of an entry on the records of the Bank
(or its agent) to reflect such transfer and payment for the
account of the Portfolio. Copies of all advices from the
Book-Entry System of transfers of Securities for the account
of any Portfolio shall identify the Portfolio, be maintained
for the Portfolio by the Bank and shall be provided to the
Portfolio at its request. The Bank shall send the Portfolio a
confirmation, as defined by Rule 17f-4 under the Act, of any
transfers to or from the account of the Portfolio;
(d) The Bank will promptly provide the Portfolio with any
report obtained by the Bank or its agent on the Book-Entry system's
accounting system, internal accounting control and procedures for
safeguarding securities deposited in the Book-Entry System; and
(e) The Bank shall be liable to the Portfolio for any loss
or damage to the Portfolio resulting from use of the Book-Entry
System by reason of any gross
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negligence, willful misfeasance or bad faith of the Bank or any of
its agents or of any of its or their employees or from any reckless
disregard by the Bank or any such agent of its duty to use its best
efforts to enforce such rights as it may have against the Book-Entry
System; at the election of the Trust on behalf of the Portfolio, it
shall be entitled to be subrogated to the Bank in any claim against
the Book-Entry System or any other person which the Bank or its
agent may have as a consequence of any such loss or damage if and to
the extent that the Portfolio has not been made whole for any loss
or damage.
6.4 USE OF A DEPOSITORY. Provided (i) the Bank has received a
certified copy of a resolution of the Board specifically approving
deposits in DTC or other such Depository and (ii) for each year following
such approval, the Board has reviewed and approved the arrangement and has
not delivered an Officer's Certificate to the Bank indicating that the
Board has withdrawn its approval:
(a) The Bank may use a Depository to hold, receive,
exchange, release, lend, deliver and otherwise deal with the
Portfolio Securities including stock dividends, rights and other
items of like nature, and to receive and remit to the Bank on behalf
of any Portfolio of the Trust all income and other payments thereon
and to take all steps necessary and proper in connection with the
collection thereof;
(b) Registration of the Portfolio Securities may be made in
the name of any nominee or nominees used by such Depository;
(c) Payment for securities purchased and sold may be made
through the clearing medium employed by such Depository for
transactions of participants acting through it. Upon any purchase of
Portfolio Securities, payment will be made only upon delivery of the
securities to or for the account of the Portfolio and the Portfolio
shall pay cash collateral against the return of Securities loaned by
the Portfolio only upon delivery of the Portfolio Securities to or
for the account of the Portfolio; and upon any sale of Portfolio
Securities, delivery of the Portfolio Securities will be made only
against payment therefor or, in the event Securities are loaned,
delivery of Securities will be made only against receipt of the
initial cash collateral to or for the account of the Portfolio; and
(d) The Bank shall be liable to any Portfolio of the Trust
for any loss or damage to the Portfolio resulting from use of a
Depository by reason of any gross negligence, willful misfeasance or
bad faith of the Bank or its employees or from any reckless
disregard by the Bank of its duty to use its best efforts to enforce
such rights as it may have against a Depository. In this connection,
the Bank shall use its best efforts to ensure that:
(i) the Depository obtains replacement of any
certificated Portfolio Security deposited with it in the event
such Security is lost, destroyed,
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wrongfully taken or otherwise not available to be returned to
the Bank upon its request.
(ii) any proxy materials received by a Depository with
respect to Portfolio Securities deposited with such Depository
are forwarded immediately to the Bank for prompt transmittal
to the affected Portfolio;
(iii) such Depository immediately forwards to the Bank
confirmation of any purchase or sale of Portfolio Securities
and of the appropriate book entry made by such Depository to
the affected Portfolio's account;
(iv) such Depository prepares and delivers to
performance of the Bank's obligations and duties hereunder as
may be necessary for the Portfolio to comply with the record
keeping requirements of Section 31(a) of the Act and Rule
31a-1 thereunder; and
(v) such Depository delivers to the Bank and the
Portfolio all internal accounting control reports, whether or
not audited by an independent public accountant, as well as
such other reports as the Portfolio may reasonably request in
order to verify the Portfolio Securities held by such
Depository.
6.5 USE OF BOOK-ENTRY SYSTEM FOR COMMERCIAL PAPER. Provided (i)
the Bank has received a certified copy of a resolution of the Board
specifically approving participation in a system maintained by the Bank
for the holding of commercial paper in book-entry form ("Book Entry
Paper") and (ii) for each year following such approval the Board has
received and approved the arrangements, upon receipt of Proper
Instructions and upon receipt of confirmation from an Issuer (as defined
below) that any Portfolio of the Trust has purchased such Issuer's Book
Entry paper, the Bank shall issue and hold in book-entry form, on behalf
of the Portfolio, commercial paper issued by issuers with whom the Bank
has entered into a book-entry agreement (the "Issuers"). In maintaining
its Book Entry Paper System, the Bank agrees that:
(a) the Bank will maintain all Book Entry Paper held by any
Portfolio of the Trust in an account of the Bank that includes only
assets held by it for customers;
(b) the records of the Bank with respect to any Portfolio of
the Trust's purchase of Book Entry Paper through the Bank will
identify, by book entry, Commercial Paper belonging to the Portfolio
which is included in the Book Entry Paper System and shall at all
times during the regular business hours of the Bank be open for
inspection by duly authorized officers, employees or agents of the
Trust;
(c) the Bank shall pay for Book Entry Paper purchased for
the account of any Portfolio of the Trust upon contemporaneous (i)
receipt of advice from the Issuer that such sale of Book Entry Paper
has been effected, and (ii) the making of an entry
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on the records of the Bank to reflect such payment and transfer for
the account of such Portfolio;
(d) The Bank shall cancel such Book Entry Paper obligation
upon the maturity thereof upon contemporaneous (i) receipt of advice
that payment for such Book Entry Paper has been transferred to the
Portfolio, and (ii) the making of an entry on the records of the
Bank to reflect such payment for the account of the Portfolio;
(e) the Bank shall transmit to the Trust a transaction
journal confirming each transaction in Book Entry Paper for the
account of any Portfolio of the Trust on the next business day
following the transactions; and
(f) the Bank will send to the Trust such reports on its
system of internal accounting control with respect to the Book Entry
Paper System as the Trust may reasonably request from time to time.
6.6 USE OF IMMOBILIZATION PROGRAMS. Provided (i) the Bank has
received a certified copy of a resolution of the Board specifically
approving the maintenance of Portfolio Securities in an immobilization
program operated by a bank which meets the requirements of Section
26(a)(1) of the Act, and (ii) for each year following such approval the
Board has reviewed and approved the arrangement and has not delivered an
Officer's Certificate to the Bank indicating that the Board has withdrawn
its approval, the Bank shall enter into such immobilization program with
such bank acting as a subcustodian hereunder.
6.7 EURODOLLAR CDs. Any Portfolio Securities which are Eurodollar
CDs may be physically held by the European branch of the U.S. banking
institution that is the issuer of such Eurodollar CD (a "European
Branch"), provided that such Securities are identified on the books of the
Bank as belonging to a Portfolio of the Trust and that the books of the
Bank identify the European Branch holding such securities. Notwithstanding
any other provision of this Agreement to the contrary, except as stated in
the first sentence of this subsection 6.7, the Bank shall be under no
other duty with respect to such Eurodollar CDs belonging to the Portfolio,
and shall have no liability to the Portfolio or its shareholders with
respect to the actions, inactions, whether negligent or otherwise of such
European Branch in connection with such Eurodollar CDs, except for any
loss of damage to the Portfolio resulting from the Bank's own gross
negligence, willful misfeasance or bad faith in the performance of its
duties hereunder.
6.8 OPTIONS AND FUTURES TRANSACTIONS.
(a) PUTS AND CALLS TRADED ON SECURITIES EXCHANGES, NASDAQ OR
OVER-THE-COUNTER.
1. The Bank shall take action as to put options ("puts")
and call options ("calls") purchased or sold (written) by any
Portfolio of the Trust regarding escrow
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or other arrangements (i) in accordance with the provisions of any
agreement entered into upon receipt of Proper Instructions between
the Bank, any broker-dealer registered under the Securities Exchange
Act of 1934 and a member of the National Association of Securities
Dealers, Inc. (the "NASD"), and, if necessary, any Portfolio of the
Trust relating to the compliance with the rules of the Options
Clearing Corporation and of any registered national securities
exchange, or of any similar organization or organizations.
2. Unless another agreement requires it to do so, the Bank
shall be under no duty or obligation to see that any Portfolio of
the Trust has deposited or is maintaining adequate margin, if
required, with any broker in connection with any option, nor shall
the Bank be under duty or obligation to present such option to the
broker for exercise unless it receives Proper Instructions from the
Portfolio. The Bank shall have no responsibility for the legality of
any put or call purchased or sold on behalf of any Portfolio of the
Trust, the propriety of any such purchase or sale, or the adequacy
of any collateral delivered to a broker in connection with an option
or deposited to or withdrawn from a Segregated Account (as defined
in subsection 6.9 below). The Bank specifically, but not by way of
limitation, shall not be under any duty or obligation to: (i)
periodically check or notify the Portfolio that the amount of such
collateral held by a broker or held in a Segregated Account is
sufficient to protect such broker of the Portfolio against any loss;
(ii) effect the return of any collateral delivered to a broker; or
(iii) advise the Portfolio that any option it holds, has or is about
to expire. Such duties or obligations shall be the sole
responsibility of the Portfolio.
(b) PUTS, CALLS AND FUTURES TRADED ON COMMODITIES EXCHANGES.
1. The Bank shall take action as to puts, calls and futures
contracts ("Futures") purchased or sold by any Portfolio of the
Trust in accordance with the provisions of any agreement among the
Portfolio, the Bank and a Futures Commission Merchant registered
under the Commodity Exchange Act, relating to compliance with the
rules of the Commodity Futures Trading Commission and/or any
Contract Market, or any similar organization or organizations,
regarding account deposits in connection with transactions by the
Portfolio.
2. The responsibilities and liabilities of the Bank as to
Futures, puts and calls traded on commodities exchanges, any Futures
Commission Merchant account and the Segregated Account shall be
limited as set forth in subparagraph (a)(2) of this Section 6.8 as
if such subparagraph referred to Futures Commission Merchants rather
than brokers, and Futures and puts and calls thereon instead of
options.
6.9 SEGREGATED ACCOUNT. The Bank shall upon receipt of Proper
Instructions establish and maintain a segregated account or accounts for
and on behalf of any Portfolio of the Trust, into which account(s) (a
"Segregated Account" or, collectively,
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"Segregated Accounts"), upon receipt of Proper Instructions, cash and/or
Portfolio Securities may be transferred:
(a) in accordance with the provisions of any agreement among
any Portfolio of the Trust, the Bank and a broker-dealer
registered under the Exchange Act and a member of the NASD or any
Futures Commission Merchant registered under the Commodity Exchange
Act, relating to compliance with the rules of the Options Clearing
Corporation and of any registered national securities exchange or
the Commodity Futures Trading Commission or any registered Contract
Market, or of any similar organization or organizations regarding
escrow or other arrangements in connection with transactions by a
Portfolio;
(b) for the purpose of segregating cash or securities in
connection with options purchased, or written by any Portfolio of
the Trust or commodity futures purchased or written by any Portfolio
of the Trust;
(c) for the deposit of liquid assets, such as cash, U.S.
Government securities or other high grade debt obligations, having a
market value (marked to the market on a daily basis) at all times
equal to not less than the aggregate purchase price due on the
settlement dates of all of any Portfolio of the Trust's then
outstanding forward commitment or "when-issued" agreements relating
to the purchase of Portfolio Securities and all the Portfolio's then
outstanding commitments under reverse repurchase agreements entered
into with broker-dealer firms;
(d) for the deposit of any Portfolio Securities which any
Portfolio of the Trust has agreed to sell on a forward commitment
basis, all in accordance with Investment Company Act Release No.
10666;
(e) for the purposes of compliance by the Trust and each
Portfolio with the procedures required by Investment Company Act
Release No. 10666, or any subsequent release or releases of the
Securities and Exchange Commission relating to the maintenance of
Segregated Accounts by registered investment companies; or
(f) for other proper corporate purposes, BUT ONLY, in the
case of this clause (f), upon receipt of, in addition to Proper
Instructions, a certified copy of a resolution of the Board, or of
the Executive Committee signed by an officer of the Trust and
certified by the Secretary of an Assistant Secretary, setting forth
the purpose or purposes of such Segregated Account and declaring
such purposes to be proper corporate purposes.
Assets may be withdrawn from the Segregated Account pursuant
to Proper Instructions only:
(i) in accordance with the provisions of any
agreements referenced in (a) or (b) above;
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(ii) for sale or delivery to meet any Portfolio of the
Trust's obligations under outstanding firm commitment or
when-issued agreements for the purchase of Portfolio
Securities and under reverse repurchase agreements;
(iii) for exchange for other liquid assets of equal or
greater value deposited in the Segregated Account;
(iv) to the extent that any Portfolio of the Trust's
outstanding forward commitment or when-issued agreements for
the purchase of portfolio securities or reverse repurchase
agreements are sold to other parties or the Portfolio's
obligations thereunder are met from assets of the Portfolio
other than those in the Segregated Account; or
(v) for delivery upon settlement of a forward
commitment agreement for the sale of Portfolio Securities.
6.10 INTEREST BEARING CALL OR TIME DEPOSITS. The Bank shall, upon
receipt of Proper Instructions relating to the purchase by any Portfolio
of the Trust of interest bearing fixed term and call deposits, transfer
cash, by wire or otherwise, in such amounts and to such bank or banks as
shall be indicated in such Proper Instructions. The Bank shall include in
its records with respect to the assets of the affected Portfolio
appropriate notation as to the amount of each such deposit, the banking
institution with which such deposit is made (the "Deposit Bank"), and
shall retain such forms of advice or receipt evidencing the deposit, if
any, as may be forwarded to the Bank by the Deposit bank. Such deposits
shall be deemed Portfolio Securities of the Portfolio and the
responsibility of the Bank therefore shall be the same as and no greater
than the Bank's responsibility in respect of other Portfolio Securities of
the Portfolio.
6.11 TRANSFER OF SECURITIES. The Bank will transfer, exchange,
deliver or release Portfolio Securities held by it hereunder, insofar as
such Securities are available for such purpose, provided that before
making any transfer, exchange, delivery or release under this Section the
Bank will receive Proper Instructions requesting such transfer, exchange
or delivery stating that it is for a purpose permitted under the terms of
this Section 6.11, specifying the applicable subsection, or describing the
purpose of the transaction with sufficient particularity to permit the
Bank to ascertain the applicable subsection, only:
(a) upon sales of Portfolio Securities for the account of
the any Portfolio of the Trust, against contemporaneous receipt by
the Bank of payment therefor in full or against payment to the Bank
in accordance with generally accepted settlement practices and
customs in the jurisdiction or market in which the transaction
occurs, each such payment to be in the amount of the sale price
shown in a broker's confirmation of sale of the Portfolio Securities
received by the Bank before such transfer is made, as confirmed in
the Proper Instructions received by the Bank before such transfer is
made;
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(b) in exchange for or upon conversion into other securities
alone or other securities and cash pursuant to any plan or merger,
consolidation, reorganization, share split-up, change in par value,
recapitalization or readjustment or otherwise, upon exercise of
subscription, purchase or sale or other similar rights represented
by such Portfolio Securities, or for the purpose of tendering shares
in the event of a tender offer therefor, provided however that in
the event of an offer of exchange, tender offer, or other exercise
of rights requiring the physical tender or delivery of Portfolio
Securities, the Bank shall have no liability for failure to so
tender in a timely manner unless such Proper Instructions are
received by the Bank at least two business days prior to the date
required for tender, and unless the Bank (or its agent or
subcustodian hereunder) has actual possession of such Security at
least two business days prior to the date of tender;
(c) upon conversion of Portfolio Securities pursuant to
their terms into other securities;
(d) for the purpose of redeeming in kind interests in any
Portfolio of the Trust upon authorization from the Portfolio;
(e) in the case of option contracts owned by any Portfolio
of the Trust, for presentation to the endorsing broker,
(f) when such Portfolio Securities are called, redeemed or
retired or otherwise become payable;
(g) for the purpose of effectuating the pledge of Portfolio
Securities held by the Bank in order to collateralize loans made to
any Portfolio of the Trust by any bank, including the Bank;
provided, however, that such Portfolio Securities will be released
only upon payment to the Bank for the account of the Portfolio of
the moneys borrowed, except that in cases where additional
collateral is required to secure a borrowing already made, and such
fact is made to appear in the Proper Instructions, further Portfolio
Securities may be released for that purpose without any such
payment. If any such pledged Portfolio Securities are held by the
Bank, they will be so held for the account of the lender, and after
notice to the Portfolio from the lender in accordance with the
normal procedures of the lender, that an event of deficiency or
default on the loan has occurred, the Bank may deliver such pledged
Portfolio Securities to or for the account of the lender;
(h) for the purpose of releasing certificates representing
Portfolio Securities, against contemporaneous receipt by the Bank of
the fair market value of such security, as set forth in Proper
Instructions received by the Bank before such payment is made;
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(i) for the purpose of delivering securities lent by any
Portfolio of the Trust to a bank or broker dealer, but only against
receipt in accordance with street delivery custom except as
otherwise provided herein, of adequate collateral as agreed upon
from time to time by the Portfolio and the Bank, and upon receipt of
payment in connection with any repurchase agreement relating to such
securities entered into by the Portfolio;
(j) for other authorized transactions of any Portfolio of
the Trust or for other proper corporate purposes; provided that
before making such transfer, the Bank will also receive a certified
copy of resolutions of the Board, signed by an authorized officer of
the Portfolio (other than the officer certifying such resolution)
and certified by its Secretary or Assistant Secretary, specifying
the Portfolio Securities to be delivered, setting forth the
transaction in or purpose for which such delivery is to be made,
declaring such transaction to be an authorized transaction of the
Portfolio or such purpose to be a proper corporate purpose, and
naming the person or persons to whom delivery of such securities
shall be made; and
(k) upon termination of this Agreement as hereinafter set
forth pursuant to Section 8 and Section 14 of this Agreement.
As to any deliveries made by the Bank pursuant to subsections (a), (b),
(c), (e), (f), (g), (h) and (i) securities or cash receivable in exchange
therefor shall be delivered to the Bank.
7. REDEMPTIONS. In the case of payment of assets of any Portfolio of
the Trust held by the Bank in connection with redemptions and repurchases by the
Portfolio of outstanding common shares, the Bank will rely on notification by
the Portfolio's transfer agent of receipt of a request for redemption and
certificates if issued, in proper form for redemption before such payment is
made. Payment shall be made in accordance with the Articles and Bylaws of the
Trust, from assets available for said purpose.
8. MERGER, DISSOLUTION, ETC. OF A PORTFOLIO. In the case of the
following transactions, not in the ordinary course of business, namely, the
merger of any Portfolio of the Trust into or the consolidation of any Portfolio
of the Trust with another investment company, the sale by any Portfolio of the
Trust of all, or substantially all, of its assets to another investment company,
or the liquidation or dissolution of any Portfolio of the Trust and distribution
of its assets, the Bank will deliver the Portfolio Securities held by it under
this Agreement and disburse cash only upon the order of the Portfolio set forth
in an Officers' Certificate, accompanied by a certified copy of a resolution of
the Board authorizing any of the foregoing transactions. Upon completion of such
delivery and disbursement and the payment of the fees, disbursements and
expenses of the Bank, this Agreement will terminate.
9. ACTIONS OF BANK WITHOUT PRIOR AUTHORIZATION. Notwithstanding
anything herein to the contrary, unless and until the Bank receives an Officers'
Certificate to the contrary, it will without prior authorization or instruction
of any Portfolio or the Trust or the transfer agent:
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9.1 endorse for collection and collect on behalf of and in the
name of any Portfolio of the Trust all checks, drafts, or other negotiable
or transferable instruments or other orders for the payment of money
received by it for the account of the Portfolio and hold for the account
of the Portfolio all income, dividends, interest and other payments or
distribution of cash with respect to the Portfolio Securities held
thereunder;
9.2 present for payment all coupons and other income items held by
it for the account of any Portfolio of the Trust which call for payment
upon presentation and hold the cash received by it upon such payment for
the account of the Portfolio;
9.3 receive and hold for the account of any Portfolio of the Trust
all securities received as a distribution on Portfolio Securities as a
result of a stock dividend, share split-up, reorganization,
recapitalization, merger, consolidation, readjustment, distribution of
rights and similar securities issued with respect to any Portfolio
Securities held by it hereunder;
9.4 execute as agent on behalf of any Portfolio of the Trust all
necessary ownership and other certificates and affidavits required by the
Internal Revenue Code or the regulations of the Treasury Department issued
thereunder, or by the laws of any state, now or hereafter in effect,
inserting the Trust's name on such certificates as the owner of the
securities covered thereby, to the extent it may lawfully do so and as may
be required to obtain payment in respect thereof. The Bank will execute
and deliver such certificates in connection with Portfolio Securities
delivered to it or by it under this Agreement as may be required under the
provisions of the Internal Revenue Code and any Regulations of the
Treasury Department issued thereunder, or under the laws of any State;
9.5 present for payment all Portfolio Securities which are called,
redeemed, retired or otherwise become payable, and hold cash received by
it upon payment for the account of any Portfolio of the Trust; and
9.6 exchange interim receipts or temporary securities for
definitive securities.
10. COLLECTION; DEFAULTS. The Bank will use all reasonable effort to
collect any funds which may to its knowledge become collectible arising from
Portfolio Securities, including dividends, interest and other income, and to
transmit promptly to the Trust notice actually received by it of any call for
redemption, offer of exchange, right of subscription, reorganization or other
proceedings affecting such Securities.
If Portfolio Securities upon which such income is payable are in default
or payment is refused after due demand or presentation, the Bank will notify the
Trust in writing of any default or refusal to pay within two business days from
the day on which it receives knowledge of such default or refusal. In addition,
the Bank will send the Trust a written report once each month showing any income
on any Portfolio Security held by it which is
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more than ten days overdue on the date of such report and which has not
previously been reported.
11. MAINTENANCE OF RECORDS. The Bank will maintain records with respect
to transactions for which the Bank is responsible pursuant to the terms and
conditions of this Agreement, and in compliance with the applicable rules and
regulations of the Act and applicable federal and state tax laws, and will
furnish the Trust daily with a statement of condition of each Portfolio of the
Trust. The Bank will furnish to the Trust at the end of every month, and at the
close of each quarter of the Trust's fiscal year, a list of the Portfolio
Securities and the aggregate amount of cash held by it for each portfolio of the
Trust. The books and records of the Bank pertaining to its actions under this
Agreement and reports by the Bank or its independent accountants concerning its
accounting system, procedures for safeguarding securities and internal
accounting controls will be open to inspection and audit at reasonable times by
officers of or auditors employed by the Trust and will be preserved by the Bank
in the manner and in accordance with the applicable rules and regulations under
the Act.
The Bank shall keep the books of account and render statements or copies
from time to time as reasonably requested by the Treasurer or any executive
officer of the Trust.
The Bank shall assist generally in the preparation of reports to
shareholders and others, audits of accounts, and other ministerial matters of
like nature.
12. PORTFOLIO EVALUATION. The Bank shall compute and, unless otherwise
directed by the Board, determine as of the close of business on the New York
Stock Exchange on each day on which said Exchange is open for unrestricted
trading and as of such other hours, if any, as may be authorized by the Board
the net asset value and the public offering price of a share of capital stock of
each Portfolio of the Trust, such determination to be made in accordance with
the provisions of the Articles and By-laws of the Trust and Prospectus and
Statement of Additional Information relating to each Portfolio and the Trust, as
they may from time to time be amended, and any applicable resolutions of the
Board at the time in force and applicable; and promptly to notify the Trust and
the National Association of Securities Dealers ("NASD") or such other persons as
the Trust may request of the results of such computation and determination. In
computing the net asset value hereunder, the Bank may rely in good faith upon
information furnished to it by any Authorized Person in respect of (i) the
manner of accrual of the liabilities of each Portfolio of the Trust and in
respect of liabilities of any Portfolio of the Trust not appearing on its books
of account kept by the Bank, (ii) reserves, if any, authorized by the Board or
that no such reserves have been authorized, (iii) the source of the quotations
to be used in computing the net asset value, (iv) the value to be assigned to
any security for which no price quotations are available, and (v) the method of
computation of the public offering price on the basis of the net asset value of
the shares, and the Bank shall not be responsible for any loss occasioned by
such reliance on any quotations received from a source pursuant to (iii) above.
13. CONCERNING THE BANK.
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<PAGE> 20
13.1 PERFORMANCE OF DUTIES; STANDARD OF CARE. In performing its
duties hereunder and any other duties listed on any Schedule hereto, if
any, the Bank will be entitled to receive and act upon the advice of
independent counsel of its own selection and reasonably acceptable to the
Trust, which may be counsel for the Trust, and will be without liability
for any action taken or thing done or omitted to be done in accordance
with this Agreement in good faith in conformity with such advice. In the
performance of its duties hereunder, the Bank will be protected and not be
liable, and will be indemnified and saved harmless for any action taken or
omitted to be taken by it in good faith reliance upon the terms of this
Agreement, any Officers' Certificate, Proper Instructions, resolution of
the Board, telegram, notice, request, certificate or other instrument
reasonably believed by the Bank to be genuine and for any other loss to
any Portfolio of the Trust except in the case of its gross negligence,
willful misfeasance or bad faith in the performance of its duties or
reckless disregard of its obligations and duties hereunder.
The Bank will be under no duty or obligation to inquire into and
will not be liable for:
(a) the validity of the issue of any Portfolio Securities
purchased by or for any Portfolio of the Trust, the legality of the
purchases thereof or the propriety of the price incurred therefor;
(b) the legality of any sale of any Portfolio Securities by
or for any Portfolio of the Trust or the propriety of the amount for
which the same are sold;
(c) the legality of an issue or sale of any common shares of
any Portfolio of the Trust or the sufficiency of the amount to be
received therefor;
(d) the legality of the repurchase of any common shares of
any Portfolio of the Trust or the propriety of the amount to be paid
therefor;
(e) the legality of the declaration of any dividend by any
Portfolio of the Trust or the legality of the distribution of any
Portfolio Securities as payment in kind of such dividend; or
(f) any property or moneys of any Portfolio of the Trust
unless and until received by it, and any such property or moneys
delivered or paid by it pursuant to the terms hereof.
Moreover, the Bank will not be under any duty or obligation to
ascertain whether any Portfolio Securities at any time delivered to
or held by it for the account of any Portfolio of the Trust are such
as may properly be held by such Portfolio under the provisions of
the Articles and By-laws of the Trust, any federal or state statutes
or any rule or regulation of any governmental agency.
17
<PAGE> 21
Notwithstanding anything in this Agreement to the contrary, in
no event shall the Bank be liable hereunder or to any third party:
(a) for any losses or damages of any kind resulting from
acts of God, earthquakes, fires, floods, storms or other
disturbances of nature, epidemics, strikes, riots, nationalization,
expropriation, currency restrictions, acts of war, civil war or
terrorism, insurrection, nuclear fusion, fission or radiation, the
interruption, loss or malfunction of utilities, transportation, or
computers (hardware or software) and computer facilities, the
unavailability of energy sources and other similar happenings or
events except as result from the Bank's own gross negligence; or
(b) for special, punitive or consequential damages arising
from the provision of services hereunder, even if the Bank has been
advised of the possibility of such damages.
13.2 AGENTS AND SUBCUSTODIANS. The Bank may employ agents in the
performance of its duties hereunder and shall be responsible for the acts
and omissions of such agents as if performed by the Bank hereunder.
Upon receipt of Proper Instructions, the Bank may employ
subcustodians in accordance with such instructions, provided that any such
subcustodian meets at least the minimum qualifications required by Section
17(f) of the Act to act as a custodian of any Portfolio of the Trust's
assets, and provided further that the Bank shall have no more or less
responsibility to any Portfolio of the Trust on account of any actions or
omissions of any subcustodian so employed than any such subcustodian has
to the Bank, provided that the liability limitations have been disclosed
to the Trust. At the election of the Trust, it shall be entitled to be
subrogated to the rights of the Bank with respect to any claims against a
subcustodian as a consequence of any such loss, damage, cost, expense,
liability or claim if and to the extent that any Portfolio or the Trust
has not been made whole for any such loss, damage, cost, expense,
liability or claim.
The affected Portfolio(s) of the Trust shall pay all appropriately
apportioned fees and expenses of any subcustodian.
13.3 INSURANCE. the Bank shall use the same care with respect to
the safekeeping of Portfolio Securities and cash of any Portfolio of the
Trust held by it as it uses in respect of its own similar property, but it
need not maintain any special insurance for the benefit of any Portfolio
or the Trust.
13.4 FEES AND EXPENSES OF BANK. The affected Portfolio of the Trust
will pay or reimburse the Bank from time to time for any transfer taxes
payable upon transfer of Portfolio Securities made hereunder, and for all
necessary proper disbursements, expenses and charges made or incurred by
the Bank in the performance of this Agreement (including any duties listed
on any Schedule hereto, if any) including any indemnities for any loss,
liabilities or expense to the Bank as provided above. For the
18
<PAGE> 22
services rendered by the Bank hereunder, the affected Portfolio will pay
to the Bank such compensation or fees at such rate and at such times as
shall be agreed upon in writing by the parties from time to time. The Bank
will also be entitled to reimbursement by any Portfolio or the Trust for
all reasonable expenses incurred in conjunction with termination of this
Agreement by the any Portfolio or the Trust.
13.5 ADVANCES BY BANK. The Bank may, in its sole discretion,
advance funds on behalf of any Portfolio of the Trust to make any payment
permitted by this Agreement upon receipt of any Proper Instructions from
the Portfolio authorizing such payments. Should such a payment or
payments, with advanced funds, result in an overdraft (due to
insufficiencies of the Portfolio's account with the Bank, or for any other
reason) any such overdraft or related indebtedness shall be deemed a loan
made by the Bank to the Portfolio payable on demand and bearing interest
at the current rate charged by the Bank for such loans unless the
Portfolio shall provide the Bank with agreed upon compensating balances.
The Portfolio agrees that the Bank shall have a continuing lien and
security interest to the extent of any overdraft or indebtedness, in and
to any property at any time held by it for the Portfolio's benefit or in
which the Portfolio has an interest and which is then in the Bank's
possession or control (or in the possession or control of any third party
acting on the Bank's behalf). The Portfolio authorizes the Bank, in its
sole discretion, at any time to charge any overdraft of indebtedness,
together with interest due thereon against any balance of account standing
to the credit of the Portfolio on the Bank's books.
14. TERMINATION.
14.1 This Agreement may be terminated at any time without penalty
upon sixty days written notice delivered by either party to the other by
means of registered mail, and upon the expiration of such sixty days this
Agreement will terminate; provided, however, that the effective date of
such termination may be postponed to a date not more than ninety days from
the date of delivery of such notice (i) by the Bank in order to prepare
for the transfer by the Bank of all of the assets of any Portfolio or the
Trust held hereunder, and (ii) by any Portfolio or the trust in order to
give the Portfolio or the Trust an opportunity to make suitable
arrangements for a successor custodian. At any time after the termination
of this Agreement, any Portfolio or the Trust will, at its request, have
access to the records of the Bank relating to the performance of its
duties as custodian.
14.2 In the event of the termination of this Agreement, the Bank
will immediately upon receipt or transmittal, as the case may be, of
notice of termination, commence and prosecute diligently to completion the
transfer of all cash and the delivery of all Portfolio Securities held by
it hereunder, duly endorsed, together with all records maintained under
Section 11, to the successor custodian when appointed by any Portfolio or
the Trust. The obligation of the Bank to deliver and transfer over the
assets of any Portfolio or the Trust held by it directly to such successor
custodian will commence as soon as such successor is appointed and will
continue until completed as
19
<PAGE> 23
aforesaid. If any Portfolio or the Trust does not select a successor
custodian within ninety (90) days from the date of delivery of notice of
termination the Bank may, subject to the provisions of subsection (13.4),
deliver the Portfolio Securities and cash of any Portfolio or the Trust
held by the Bank to a bank or trust company of its own selection which
meets the requirements of Section 17(f)(1) of the Act and has a reported
capital, surplus and undivided profits aggregating not less than
$2,000,000, to be held by such bank or trust company as the property of
any Portfolio or the Trust under terms similar to those on which they were
held by the Bank, whereupon such bank or trust company so selected by the
Bank will become the successor custodian of such assets of any Portfolio
or the Trust with the same effect as though selected by the Board.
14.3 Prior to the expiration of ninety (90) days after notice of
termination has been given, the Portfolio or the Trust may furnish the
Bank with an order of the Portfolio or the Trust advising that a successor
custodian cannot be found willing and able to act upon reasonable and
customary terms and that there has been submitted to the shareholders of
the Portfolio or the Trust the question or whether the Portfolio or the
Trust will be liquidated or will function without a custodian for the
assets of the Portfolio or the Trust held by the Bank. In that event the
Bank will deliver the Portfolio Securities and cash of the Portfolio or
the Trust held by it, in accordance with such alternatives as is approved
by the requisite vote of shareholders, upon receipt by the Bank of a copy
of the minutes of the meeting of shareholders at which action was taken,
certified by the Trust's Secretary and an opinion of counsel to the Trust
in form and content satisfactory to the Bank.
15. CONFIDENTIALITY. Both parties hereto agree that any non-public
information obtained hereunder concerning the other party is confidential and
may not be disclosed to any other person without the consent of the other party,
except as may be required by applicable law or at the request of a governmental
agency. The parties further agree that a breach of this provision would
irreparably damage the other party and accordingly agree that each of them is
entitled, without bond or other security, to an injunction or injunctions to
prevent breaches of this provision.
16. NOTICES. Any notice or other instrument in writing authorized or
required by this Agreement to be given to either party hereto will be
sufficiently given if addressed to such party and mailed or delivered to it at
its office at the address set forth below; namely:
(a) In the case of notices sent to any Portfolio or the Trust to:
Select Advisors Variable Insurance Trust
318 Broadway
Cincinnati, Ohio 45202
(b) In the case of notices sent to the Bank to:
Investors Bank & Trust Company
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<PAGE> 24
P.O. Box 1537
Boston, Massachusetts 02205-1537
or at such other place as such party may from time to time designate
in writing.
17. AMENDMENTS. This Agreement may not be altered or amended, except by
an instrument in writing, executed by both parties, and in the case of the
Trust, such alteration or amendment will be authorized and approve by its Board.
18. PARTIES. This Agreement will be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns;
provided, however, that this Agreement will not be assignable by the Trust
without the written consent of the Bank or by the Bank without the written
consent of the Trust, authorized and approved by its Board; and provided further
that termination proceedings pursuant to Section 14 hereof will not be deemed to
be an assignment within the meaning of this provision.
19. GOVERNING LAW. This Agreement and all performance hereunder will be
governed by the laws of the Commonwealth of Massachusetts.
20. LIMITATIONS OF LIABILITY. A copy of the Declaration of Trust of the
Trust is on file with the Secretary of the State, and notice is hereby given
that this instrument is executed on behalf of the Trustees of the Trust as
Trustees and not individually and that the obligations of this instrument are
not binding upon any of the Trustees of Officers of the Trust individually.
21. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
21
<PAGE> 25
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
and year first written above.
SELECT ADVISORS VARIABLE INSURANCE TRUST
BY: /s/ Edward G. Harness, Jr.
------------------------------------
ATTEST:
/s/ Jill T. McGruder
- -----------------------------
INVESTORS BANK AND TRUST COMPANY
BY: /s/ Kevin J. Sheehan
------------------------------------
ATTEST:
/s/ John Lippett
- -----------------------------
DATE: 8/22/94
22
<PAGE> 1
Exhibit (9B)
SPONSOR AGREEMENT
SPONSOR AGREEMENT, dated as of September 9, 1994, by and between Select
Advisors Variable Insurance Trust, a Massachusetts business trust (the "Trust"),
and Touchstone Advisors, Inc., an Ohio corporation ("Touchstone").
W I T N E S S E T H:
WHEREAS, the Trust is engaged in business as an open-end investment
company registered under the Investment Company Act of 1940, as amended
(collectively with the rules and regulations promulgated thereunder as amended
from time to time, the "1940 Act");
WHEREAS, the Trust wishes to engage Touchstone to sponsor, and provide
certain management services with respect to, all currently existing or future
series (each a "Portfolio") of the Trust, and Touchstone is willing to provide
such services to the Trust, on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties hereto as herein set forth, the parties covenant and agree as
follows:
1. DUTIES OF TOUCHSTONE. Subject to the direction and control of
the Board of Trustees of the Trust (the "Board"), Touchstone shall perform such
sponsorship and management and supervisory services as may from time to time be
reasonably requested by the Trust, which shall include without limitation: (a)
providing office space, equipment and clerical personnel necessary for
performing the management functions herein set forth; (b) arranging, if desired
by the Trust, for directors, officers or employees of Touchstone to serve as
Trustees, officers or agents of the Trust if duly elected or appointed to such
positions and subject to their individual consent and to any limitations imposed
by law; (c) supervising the overall administration of the Trust, including the
provision of services to the Trust by the Trust's administrator and fund
accounting agent, transfer agent and custodian, which services include without
limitation: (i) updating of corporate organizational documents, and the
negotiation of contracts and fees with and the monitoring and coordinating of
performance and billings of the Trust's transfer agent, custodian, shareholder
servicing agents and other independent contractors or agents, (ii) the
preparation of and filing of documents required for compliance by the Trust with
applicable laws and regulations (including state "blue sky" laws and
regulations), including registration statements on Form N-1A (or other
applicable form), prospectuses and statements of additional information,
semi-annual and annual reports to the Trust's shareholders, (iii) reviewing
(including coordinating the preparing of, but not preparing) tax returns, (iv)
preparation of agendas and supporting documents for and minutes of meetings of
Trustees, committees of Trustees and preparation of notices, proxy statements
and minutes of meetings of one or more Portfolios' shareholders, (v) the
maintenance of books and records of the Trust, (vi) telephone coverage to
respond to shareholder inquiries, (vii) the provision of monitoring reports and
assistance regarding the Portfolios' compliance with
<PAGE> 2
federal securities and tax laws including compliance with the 1940 Act and
Subchapter M of the Internal Revenue Code of 1986, as amended, (viii) the
dissemination of yield and other performance information to newspapers and
tracking services, (ix) the preparation of annual renewals for fidelity bond and
errors and omissions insurance coverage, (x) the development of a budget for the
Trust, the establishment of the rate of expense accruals and the arrangement of
the payment of all fixed and management expenses, and (xi) the determination of
each Portfolio's net asset value and the provision of all other fund accounting
services to the Portfolios.
2. ORGANIZATION EXPENSES. Touchstone shall pay all of the
organization expenses of the Trust which were paid prior to the Trust's or any
Portfolio's commencement of investment operations. The Portfolios shall
reimburse Touchstone, without any interest or carrying charges, for such
organization expenses.
3. ALLOCATION OF CHARGES AND EXPENSES. Touchstone shall pay the
entire salaries and wages of all of the Trust's Trustees, officers and agents
who devote part or all of their time to the affairs of Touchstone or its
affiliates, and the wages and salaries of such persons shall not be deemed to be
expenses incurred by the Trust.
4. OPERATING EXPENSE WAIVERS OR REIMBURSEMENT. Touchstone shall
waive all or a portion of its fee pursuant to this Sponsor Agreement and/or
reimburse a portion of the operating expenses (including amortization of
organization expense but excluding interest, taxes, brokerage commissions and
other portfolio transaction expenses, capital expenditures and extraordinary
expenses) ("Expenses") of each Portfolio of the Trust such that after such
reimbursement the aggregate Expenses of the Portfolio shall be equal on an
annual basis to the following percentages of the average daily net assets of the
Portfolio for the Portfolio's then-current fiscal year: Emerging Growth
Portfolio, 1.15%; International Equity Portfolio, 1.25%; Growth & Income
Portfolio, 0.85%; Balanced Portfolio, 0.90%; Income Opportunity Portfolio,
0.85%; and Standby Income Portfolio, 0.50%.
Touchstone's obligations in this Section 4 may be terminated,
with respect to any Portfolio, by Touchstone as of the end of any calendar
quarter after December 31, 1995, upon at least 30 days prior written notice to
the Trust (an "Expense Cap Termination").
5. COMPENSATION OF TOUCHSTONE. For the services to be rendered, the
facilities to be provided and the expenses to be assumed by Touchstone
hereunder, the Trust shall pay to Touchstone a sponsor fee from the assets of
each Portfolio equal on an annual basis to 0.20% of the Portfolio's average
daily net assets for that Portfolio's then-current fiscal year.
If Touchstone serves under this Agreement for less than the
whole of any month, the compensation to Touchstone hereunder shall be prorated.
For purposes of
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<PAGE> 3
computing the fees payable to Touchstone hereunder, the net asset value of each
Portfolio shall be computed in the manner specified in that Portfolio's
then-current registration statement.
Touchstone hereby waives all of its fees under this Agreement
with respect to each Portfolio until April 30, 1996.
6. LIMITATION OF LIABILITY OF TOUCHSTONE. Touchstone shall not be
liable for any error of judgment or mistake of law or for any act or omission in
the sponsorship or management of the Trust or the performance of its duties
hereunder, except for willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of the reckless disregard of its
obligations and duties hereunder. As used in this Section 6, the term
"Touchstone" shall include Touchstone and/or any of its affiliates and the
directors, officers and employees of Touchstone and/or any of its affiliates.
7. ACTIVITIES OF TOUCHSTONE. The services of Touchstone to the
Trust are not to be deemed to be exclusive, Touchstone being free to render
similar sponsorship and management services and/or other services to other
parties. It is understood that Trustees and officers of the Trust, and
shareholders of a Portfolio are or may become interested in Touchstone and/or
any of its affiliates, as directors, officers, employees, or otherwise, and that
directors, officers and employees of Touchstone and/or any of its affiliates are
or may become similarly interested in the Trust and that Touchstone and/or any
of its affiliates may be or become interested in the Trust as a shareholder of a
Portfolio or otherwise.
8. DURATION, TERMINATION AND AMENDMENT. This Agreement shall become
effective as of the day and year first above written and shall govern the
relations between the parties hereto until terminated in accordance with this
Section 8. Except for an Expense Cap Termination, this Agreement may not be
altered or amended except by an instrument in writing signed by both parties.
This agreement may be terminated, with respect to any Portfolio
or Portfolios:
(a) by Touchstone, either (i) at the end of the calendar
quarter after December 31, 1995 during which Touchstone has given at
least 30 days advance written notice to the Trust, on behalf of each
such Portfolio, that it is terminating this agreement as to such
Portfolio or (ii) at such time as Touchstone ceases to be the investment
advisor to such Portfolio. In the event of a termination pursuant to
clause (i) of the preceding sentence, each party's obligations hereunder
shall terminate as to each such Portfolio as of the end of the calendar
quarter in which the notice of termination is given; in the event of a
termination pursuant to clause (ii) of the preceding sentence
Touchstone's obligations hereunder shall terminate as to each such
Portfolio as of the effective date of its termination as investment
advisor.
-3-
<PAGE> 4
(b) by the Board, or by the vote of a "majority of the
outstanding voting securities" (as such phrase is defined in the 1940
Act) of each such Portfolio, as of the end of the calendar quarter
during which the Trust, on behalf of each such Portfolio, has given at
least 30 days advance written notice to Touchstone that it is
terminating this agreement as to each such Portfolio.
9. SUBCONTRACTING BY TOUCHSTONE. Touchstone may subcontract for the
performance of Touchstone's obligations hereunder with any one or more persons;
provided, however, that Touchstone shall be as fully responsible to the Trust
for the acts and omissions of any subcontractor as it would be for its own acts
or omissions.
10. SEVERABILITY. If any provision of this Agreement shall become or
shall be found to be invalid by a court decision, statute, rule or otherwise,
the remainder of this Agreement shall not be affected thereby.
11. NOTICE. Any notices under this Agreement shall be in writing
addressed and delivered personally (or by telecopy) or mailed postage-paid, to
the other party at such address as such other party may designate in accordance
with this paragraph for the receipt of such notice. Until further notice to the
other party, it is agreed that the address of the Trust and touchstone shall be
318 Broadway, Cincinnati, Ohio 45202.
12. MISCELLANEOUS. Each party agrees to perform such further actions
and execute such further documents as are necessary to effectuate the purposes
hereof. This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Ohio. The captions in this Agreement are
included for convenience only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, but such counterparts shall, together, constitute only
one instrument.
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. The
undersigned has executed this Agreement not individually, but as an officer
under the Trust's Declaration of Trust, and the obligations of this Agreement
are not binding upon the Trust's Trustees, its officers, or shareholders of the
Portfolios individually, but bind only the Trust estate.
SELECT ADVISORS VARIABLE INSURANCE TRUST
By: /s/ Edward G. Harness, Jr.
----------------------------------
Name: Edward G. Harness, Jr.
Title: President
-4-
<PAGE> 5
TOUCHSTONE ADVISORS, INC.
By: /s/ Jill T. McGruder
----------------------------------
Name: Jill T. McGruder
Title: Vice President
Attest:
By: /s/ Donald J. Wuebbling
--------------------------------
Donald J. Wuebbling
Secretary
-5-
<PAGE> 1
Exhibit (10)
JAMES B. CRAVER
6 ST. JAMES AVENUE
NINTH FLOOR
BOSTON, MASSACHUSETTS 02116
617-423-0800
November 9, 1994
Select Advisors Variable Insurance Trust
318 Broadway
Cincinnati, Ohio 45202
Ladies and Gentlemen:
RE: REGISTRATION OF SHARES OF BENEFICIAL INTEREST UNDER RULE 24F-2 OF THE
INVESTMENT COMPANY ACT OF 1940
This opinion is being furnished in connection with the filing of the
registration statement on Form N-1A under the Investment Company Act of 1940, as
amended (the "1940 Act"), and the Securities Act of 1933, as amended (the "1933
Act"), of Select Advisors Variable Insurance Trust, a Massachusetts business
trust (the "Trust"), and in conjunction with the registration, pursuant to Rule
24f-2 under the 1940 Act, of an indefinite number of Shares of Beneficial
Interest (par value $0.00001 per share) (the "Shares") of the Trust's initial
series -- Touchstone Emerging Growth Portfolio, Touchstone Income Opportunity
Portfolio, Touchstone International Equity Portfolio, Touchstone Standby Income
Portfolio and Touchstone Balanced Portfolio -- under the 1933 Act.
This opinion is limited solely to the laws of the Commonwealth of
Massachusetts as applied by courts in such Commonwealth. This opinion is limited
solely to the Shares as reflected on the audited balance sheets of the Trust
dated November 9, 1994. I understand that the foregoing limitation is acceptable
to you.
I have examined copies of the Trust's Declaration of Trust, its
By-Laws, resolutions adopted by its Board of Trustees and such other records and
documents as I have deemed necessary for purposes of this opinion.
Based upon the subject of the foregoing, please be advised that it is
my opinion that the Trust's Shares are legally issued and (to the extent still
outstanding) are fully paid and non assessable, except that, as set forth in the
Trust's registration statement as currently in effect filed with the Securities
and Exchange Commission pursuant to the 1933 Act, shareholders of the Trust may
under certain circumstances be held personally liable for its obligations.
Very truly yours,
/s/ James B. Craver
----------------------------------
James B. Craver
<PAGE> 1
Exhibit (13)
[Western-Southern Life Assurance Company Letterhead]
November 10, 1994
The Select Advisors Variable Insurance Trust
318 Broadway
Cincinnati, Ohio 45202
Ladies and Gentlemen:
With respect to our purchase from you of shares of beneficial interest (the
"Initial Shares") of each of the following series (each a "Portfolio") of The
Select Advisors Variable Insurance Trust (the "Trust"):
Touchstone Emerging Growth Portfolio
Touchstone International Equity Portfolio
Touchstone Balanced Portfolio
Touchstone Income Opportunity Portfolio
Touchstone Standby Income Portfolio
we hereby advise you that we are purchasing the Initial Shares of each Portfolio
with no intention to dispose of them either through resale or redemption by the
Trust.
The amount paid by a Portfolio on any redemption by us, or any other
then-current holder of that Portfolio's Initial Shares, will be reduced by a
portion of any unamortized organization expenses of the Portfolio, such portion
to be determined by the proportion of the number of Initial Shares of the
Portfolio redeemed to the number of the Initial Shares of the Portfolio then
outstanding after taking into account any prior redemptions of the Initial
Shares of the Portfolio.
Very truly yours,
WESTERN-SOUTHERN LIFE ASSURANCE COMPANY
BY /s/ Donald J. Wuebbling
---------------------------------------
Donald J. Wuebbling, Vice President
<PAGE> 1
Exhibit (16)
SELECT ADVISORS VARIABLE INSURANCE TRUST
TOTAL RETURN
Quotations of a Portfolio's average annual total return will be
expressed in terms of the average annual compounded rate of return of a
hypothetical investment in such Portfolio over periods of 1, 5 and 10 years (up
to the life of the Portfolio), calculated pursuant to the following formula:
P (1 + T)n = ERV
(where P = a hypothetical initial payment of $1,000, T = the average annual
total return, n = the number of years and ERV = the ending redeemable value of a
hypothetical $1,000 payment made at the beginning of the period). All total
return figures will reflect the deduction of Portfolio expenses (net of certain
expenses reimbursed) on an annual basis and will assume that all dividends and
distributions are reinvested when paid.
30-DAY YIELD
Quotations of yield will be based on a Portfolio's investment income per share
earned during a particular 30-day period, less expenses accrued during the
period ("net investment income") and will be computed by dividing net investment
income by the maximum offering price per share on the last day of the period
according to the following formula:
30-DAY YIELD = 2[(a-b/cd + 1)6 - 1]
(where a = dividends and interest earned during the period, b = expenses accrued
for the period (net of any reimbursements), c = the average daily number of
shares outstanding during the period that were entitled to receive dividends and
d = the maximum offering price per share on the last day of the period).
