AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT effective as of the 20th day of November,
2002 (the "Contract Date") is by and between Phoenix-Xxxxxxx
California Tax Exempt Bond Fund, a Delaware business trust (the
"Trust") and Phoenix Investment Counsel, Inc., a Connecticut
corporation (the "Adviser").
By the terms of that certain Substitution Agreement dated
May 27, 1998, the Trust and Adviser are parties to a certain
Investment Advisory Agreement effective as of March 14, 1997, as
amended (collectively the "Agreement"). The parties mutually
desire to amend and restate the Agreement as follows:
WITNESSETH THAT:
1. The Trust has appointed the Adviser to act as
investment adviser to the Trust on behalf of the series of the
Trust established and designated by the Board of Trustees of the
Trust (the "Trustees") on or before the date hereof, as listed
on attached Schedule A (collectively, the Existing Series), for
the period and on the terms set forth herein. The Adviser has
accepted such appointment and has agreed to render the services
described in this Agreement for the compensation herein
provided.
2. In the event that the Trustees desire to retain the
Adviser to render investment advisory services hereunder with
respect to one or more additional series (the "Additional
Series"), by agreement in writing, the Trust and the Adviser may
agree to amend Schedule A to include such Additional Series,
whereupon such Additional Series shall become subject to the
terms and conditions of this Agreement.
3. The Adviser shall furnish continuously an investment
program for the Existing Series and any Additional Series which
may become subject to the terms and conditions set forth herein
(sometimes collectively referred to as the "Series") and shall
manage the investment and reinvestment of the assets of each
Series, subject to all times to the supervision of the Trustees.
4. With respect to managing the investment and
reinvestment of the Series' assets, the Adviser shall provide,
at its own expense:
(a) Investment research, advice and supervision;
(b) An investment program for each Series consistent
with its investment objectives, policies and
procedures;
(c) Implementation of the investment program for each
Series including the purchase and sale of
securities;
(d) Implementation of an investment program designed
to manage cash, cash equivalents and short-term
investments for a Series with respect to assets
designated from time to time to be managed by a
subadviser to such Series;
(e) Advise and assistance on the general operations
of the Trust; and
(f) Regular reports to the Trustees on the
implementation of each Series' investment
program.
5. The Adviser shall, for all purposes herein, be deemed
to be an independent contractor.
6. The Adviser shall furnish at its own expense, or pay
the expenses of the Trust, for the following:
(a) Office facilities, including office space,
furniture and equipment;
(b) Personnel necessary to perform the functions
required to manage the investment and
reinvestment of each Series' assets (including
those required for research, statistical and
investment work);
(c) Except as otherwise approved by the Board,
personnel to serve without salaries from the
Trust as officers or agents of the Trust. The
Adviser need not provide personnel to perform, or
pay the expenses of the Trust for, services
customarily performed for an open-end management
investment company by its national distributor,
custodian, financial agent, transfer agent,
registrar, dividend disbursing agent, auditors
and legal counsel;
(d) Compensation and expenses, if any, of the
Trustees who are also full-time employees of the
Adviser or any of its affiliates; and
(e) Any subadviser recommended by the Adviser and
appointed to act on behalf of the Trust.
7. All costs and expenses not specifically enumerated
herein as payable by the Adviser shall be paid by the Trust.
Such expenses shall include, but shall not be limited to, all
expenses (other than those specifically referred to as being
borne by the Adviser) incurred in the operation of the Trust and
any public offering of its shares, including, among others,
interest, taxes, brokerage fees and commissions, fees of
Trustees who are not full-time employees of the Adviser or any
of its affiliates, expenses of Trustees' and shareholders'
meetings including the cost of printing and mailing proxies,
expenses of Adviser personnel attending Trustee meetings as
required, expenses of insurance premiums for fidelity and other
coverage, expenses of repurchase and redemption of shares,
expenses of issue and sale of shares (to the extent not borne by
its national distributor under its agreement with the Trust),
expenses of printing and mailing stock certificates representing
shares of the Trust, association membership dues, charges of
custodians, transfer agents, dividend disbursing agents and
financial agents, bookkeeping, auditing and legal expenses. The
Trust will also pay the fees and bear the expense of registering
and maintaining the registration of the Trust and its shares
with the Securities and Exchange Commission and registering or
qualifying its shares under state or other securities laws and
the expense of preparing and mailing prospectuses and reports to
shareholders. Additionally, if authorized by the Trustees, the
Trust shall pay for extraordinary expenses and expenses of a
non-recurring nature which may include, but not be limited to
the reasonable and proportionate cost of any reorganization or
acquisition of assets and the cost of legal proceedings to which
the Trust is a party.
8. The Adviser shall adhere to all applicable policies
and procedures as adopted from time to time by the Trustees,
including but not limited to the following:
(a) Code of Ethics. The Adviser shall adopt a Code
of Ethics designed to prevent "access persons"
(as defined therein in accordance with Rule 17j-1
under the Investment Company Act of 1940 (the
"Investment Company Act")) from engaging in
fraudulent acts or transactions that are, or have
the potential of being viewed as, a conflict of
interest, and shall monitor for compliance with
its Code of Ethics and report any violations to
the Trust's Compliance Officer.
(b) Policy with Respect to Brokerage Allocation. The
Adviser shall have full trading discretion in
selecting brokers for Series transactions on a
day to day basis so long as each selection is in
conformance with the Trust's Policy with Respect
to Brokerage Allocation. Such discretion shall
include use of "soft dollars" for certain broker
and research services, also in conformance with
the Trust's Policy with Respect to Brokerage
Allocation. The Adviser may delegate the
responsibilities under this section to a
Subadviser of a Series.
(c) Procedures for the Determination of Liquidity of
Assets. It shall be the responsibility of the
Adviser to monitor the Series' assets that are
not liquid, making such determinations as to
liquidity of a particular asset as may be
necessary, in accordance with the Trust's
Procedures for the Determination of Liquidity of
Assets. The Adviser may delegate the
responsibilities under this section to a
Subadviser of a Series.
(d) Policy with Respect to Proxy Voting. In the
absence of specific direction to the contrary and
in a manner consistent with the Trust's Policy
with Respect to Proxy Voting, the Adviser shall
be responsible for voting proxies with respect to
portfolio holdings of the Trust. The Adviser
shall review all proxy solicitation materials and
be responsible for voting and handling all
proxies in relation to the assets under
management by the Adviser in accordance with such
policies and procedures adopted or approved by
each Series'. Unless the Fund gives the Adviser
written instructions to the contrary, the Adviser
will, in compliance with the proxy voting
procedures of the Series then in effect or
approved by the series, vote or abstain from
voting, all proxies solicited by or with respect
to the issuer of securities in which the assets
of the Series may be invested. The Adviser shall
cause the Custodian to forward promptly to the
Adviser (or designee) all proxies upon receipt so
as to afford the Adviser a reasonable amount of
time in which to determine how to vote such
proxies. The Adviser agrees to provide the Trust
with quarterly proxy voting reports in such form
as the Trust may request from time to time. The
Adviser may delegate the responsibilities under
this Section to a Subadviser of a Series.
(e) Procedures for the Valuation of Securities. It
shall be the responsibility of the Adviser to
fully comply with the Trust's Procedures for the
Valuation of Securities. The Adviser may
delegate the responsibilities under this section
to a Subadviser of a Series.
9. For providing the series and assuming the expenses
outlined herein, the Trust agrees that the Adviser shall be
compensated as follows:
(a) The Trust shall pay a monthly fee calculated at
an annual rate as specified in Schedule A. The
amounts payable to the Adviser with respect to
the respective Series shall be based upon the
average of the values of the net assets of such
Series as of the close of business each day,
computed in accordance with the Trust's
Declaration of Trust.
(b) Compensation shall accrue immediately upon the
effective date of this Agreement.
(c) If there is termination of this Agreement with
respect to any Series during a month, the Series'
fee for that month shall be proportionately
computed upon the average of the daily net asset
values of such Series for such partial period in
such month.
(d) The Adviser agrees to reimburse the Trust for the
amount, if any, by which the total operating and
management expenses for any Series (including the
Adviser's compensation, pursuant to this
paragraph, but excluding taxes, interest, costs
of portfolio acquisitions and dispositions and
extraordinary expenses), for any "fiscal year"
exceed the level of expenses which such Series is
permitted to bear under the most restrictive
expense limitation (which is not waived by the
State) imposed on open-end investment companies
by any state in which shares of such Series are
then qualified. Such reimbursement, if any, will
be made by an Adviser to the Trust within five
days after the end of each month. For the
purpose of this subparagraph (d), the term
"fiscal year" shall include the portion of the
then current fiscal year which shall have elapsed
at the date of termination of this Agreement.
10. The services of the Adviser to the Trust are not to be
deemed exclusive, the Adviser being free to render services to
others and to engage in other activities. Without relieving the
Adviser of its duties hereunder and subject to the prior
approval of the Trustees and subject farther to compliance with
applicable provisions of the Investment Company Act, as amended,
the Adviser may appoint one or more agents to perform any of the
functions and services which are to be provided under the terms
of this Agreement upon such terms and conditions as may be
mutually agreed upon among the Trust, the Adviser and any such
agent.
11. The Adviser shall not be liable to the Trust or to any
shareholder of the Trust for any error of judgment or mistake of
law or for any loss suffered by the Trust or by an shareholder
of the Trust in connection with the matters to which this
Agreement relates, except a loss resulting from willful
misfeasance, bath faith, gross negligence or reckless disregard
on the part of the Adviser in the performance of its duties
hereunder.
12. It is understood that:
(a) Trustees, officers, employees, agents and
shareholders of the Trust are or may be
"interested persons" of the Adviser as directors,
officers, stockholders or otherwise;
(b) Directors, officers, employees, agents and
stockholders of the Adviser are or may be
"interested persons" of the Trust as Trustees,
officers, shareholders or otherwise; and
(c) The existence of any such dual interest shall not
affect the validity hereof or any transactions
hereunder.
13. This Amended and Restated Agreement shall become
effective with respect to the Existing Series as of November 20,
2002, and with respect to any Additional Series, on the date
specified in any amendment to this Agreement reflecting the
addition of each Additional Series in accordance with paragraph
2 (the "Amendment Date"). Unless terminated as herein provided,
this Agreement shall remain in full force and effect until
November 30, 2003 with respect to each Existing Series and until
November 30 of the first full calendar year following the
Amendment Date with respect to each Additional Series, and shall
continue in full force and effect for periods of one year
thereafter with respect to each Series so long as (a) such
continuance with respect to any such Series is approved at least
annually by either the Trustees or by a "vote of the majority of
the outstanding voting securities" of such Series and (b) the
terms and any renewal of this Agreement with respect to any such
Series have been approved by a vote of a majority of the
Trustees who are not parties to this Agreement or "interested
persons" of any such party cast in person at a meeting called
for the purpose of voting on such approval; provided, however,
that the continuance of this Agreement with respect to each
Additional Series is subject to its approval by a "vote of a
majority of the outstanding voting securities" of any such
Additional Series on or before the next anniversary of the
Contract Date following the date on which such Additional Series
became a Series hereunder.
Any approval of this Agreement by a vote of the
holders of a "majority of the outstanding voting securities" of
any Series shall be effective to continue this Agreement with
respect to such Series notwithstanding (a) that this Agreement
has not been approved by a "vote of a majority of the
outstanding voting securities" of any other Series of the Trust
affected thereby and (b) that this Agreement has not been
approved by the holders of a "vote of a majority of the
outstanding voting securities" of the Trust, unless either such
additional approval shall be required by any other applicable
law or otherwise.
14. The Trust may terminate this Agreement with respect to
the Trust or to any Series upon 60 days' written notice to the
Adviser at any time, without the payment of any penalty, by vote
of the Trustees or, as to each Series, by a "vote of the
majority of the outstanding voting securities" of such Series.
The Adviser may terminate this Agreement upon 60 days' written
notice to the Trust, without the payment of any payment. This
Agreement shall immediately terminate in the event of its
"assignment".
15. The terms "majority of the outstanding voting
securities", "interested persons" and "assignment", when used
herein, shall have the respective meanings in the Investment
Company Act.
16. In the event of termination of this Agreement, or at
the request of the Adviser, the Trust will eliminate all
reference to "Phoenix" from its name, and will not thereafter
transact business in a name using the word "Phoenix" in any form
or combination whatsoever, or otherwise use the word "Phoenix"
as a part of its name. The Trust will thereafter in all
prospectuses, advertising materials, letterheads, and other
material designed to be read by investors or prospective
investors delete from the name the word "Phoenix" or any
approximation thereof. If the Adviser chooses to withdraw the
Trust's right to use the word "Phoenix," it agrees to submit the
question of continuing this Agreement to a vote of the Trust's
shareholders at the time of such withdrawal.
17. It is expressly agreed that the obligations of the
Trust hereunder shall not be binding upon any of the Trustees,
shareholders, nominees, officers, agents or employees of the
Trust personally, but bind only the trust property of the Trust,
as provided in the Declaration of Trust. The execution and
delivery of this Agreement have been authorized by the Trustees
and shareholders of the Trust and signed by the President of the
Trust, acting as such, and neither such authorization by such
Trustees and shareholders nor such execution and delivery by
such officer shall be deemed to have been made by any of them
individually or be binding upon or impose any liability on any
of them personally, but shall bind only the trust property of
the Trust as provided in its Declaration of Trust. The
Certificate of Trust, as amended, is or shall be on file with
the Secretary of State of Delaware.
18. This Agreement shall be construed and the rights and
obligations of the parties hereunder enforced in accordance with
the laws of the State of Connecticut.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers as of
the day and year first written above.
Phoenix-Xxxxxxx California Tax
Exempt Bond Fund
By: /s/ Xxxxxx X. XxXxxxxxxx
Name: Xxxxxx X. XxXxxxxxxx
Title: President
Phoenix Investment Counsel, Inc.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
SCHEDULE A
Series
Investment Advisory Fee
$1st billion 1+ Billion $2+ Billion
to $2 Billion
Phoenix-Xxxxxxx California Tax Exempt Bond Fund
0.45% 0.40% 0.35%
The parties to this Agreement hereby acknowledge the following
name change: Phoenix-Xxxxxxx California Tax Exempt Bond Fund
f/k/a Phoenix California Tax Exempt Bonds, Inc.
