EXHIBIT 5.14
SUB-ADVISORY AGREEMENT
SUB-ADVISORY AGREEMENT
PHOENIX-XXXXXX XXXXXXX FOCUS EQUITY SERIES
This Sub-Advisory Agreement (the "Agreement") is entered into as of
December [INSERT], 1999 by and between Phoenix Variable Advisors, Inc., a
Delaware corporation (the "Manager"), and Xxxxxx Xxxxxxx Xxxx Xxxxxx Investment
Management Inc., a Delaware corporation (the "Sub-Adviser").
WHEREAS, the Manager has entered into an Advisory Agreement dated
[INSERT] (the "Advisory Agreement") with The Phoenix Edge Series Fund (the
"Fund"), pursuant to which the Manager provides portfolio management and
administrative services to the Phoenix-Xxxxxx Xxxxxxx Focus Equity Series of the
Fund (the "Portfolio").
WHEREAS, the Advisory Agreement provides that the Manager may delegate
any or all of its portfolio management responsibilities under the Advisory
Agreement to one or more sub-advisers;
WHEREAS, the Manager desires to retain the Sub-Adviser to render
portfolio management services in the manner and on the terms set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, the Manager and the Sub-Adviser agree as follows:
1. Sub-Advisory Services.
a. The Sub-Adviser shall, subject to the supervision of the
Manager and in cooperation with any administrator appointed by the Manager (the
"Administrator"), manage the investment and reinvestment of the assets of the
Portfolio. The Sub-Adviser shall manage the Portfolio in conformity with (1) the
investment objective, policies and restrictions of the Portfolio set forth in
the Fund's prospectus and statement of additional information relating to the
Portfolio, (2) any additional policies or guidelines established by the Manager
or by the Fund's directors that have been furnished in writing to the
Sub-Adviser and (3) the provisions of the Internal Revenue Code (the "Code")
applicable to "regulated investment companies" (as defined in Section 851 of the
Code), all as from time to time in effect (collectively, the "Policies"), and
with all applicable provisions of law, including without limitation all
applicable provisions of the Investment Company Act of 1940, as amended (the
"1940 Act") and the rules and regulations thereunder. Subject to the foregoing,
the Sub-Adviser is authorized, in its discretion and without prior consultation
with the Manager, to buy, sell, lend and otherwise trade in any stocks, bonds
and other securities and investment instruments on behalf of the Portfolio,
without regard to the length of time the securities have been held and the
resulting rate of portfolio turnover or any tax considerations; and the majority
or the whole of the Portfolio may be invested in such proportions of stocks,
bonds, other securities or investment instruments, or cash, as the Sub-Adviser
shall determine. In managing the Portfolio, the Sub-Adviser agrees to use its
best professional judgement to make investment decisions for the Portfolio in
accordance with the provisions of this Agreement. Notwithstanding the foregoing
provisions of this Section 1.a, however, the Sub-Adviser shall, upon written
instructions from the Manager, effect such portfolio transactions for the
Portfolio as the Manager shall determine are necessary in order for the
Portfolio to comply with the Policies.
b. The Sub-Adviser shall furnish the Manager with quarterly
reports, in such form as may be mutually agreed upon, with respect to:
(i) compliance with the Sub-Adviser's Code of Ethics;
(ii) compliance with procedures adopted from time to
time by the Trustees of the Fund regarding securities eligible
for resale under Rule 144A under the Securities Act of 1933,
as amended;
(iii) diversification of Portfolio assets in
accordance with governing laws and the then prevailing
prospectus and statement of additional information pertaining
to the Portfolio;
(iv) compliance with the Portfolio's limitation
regarding the acquisition of illiquid securities; and
(v) the implementation of the Portfolio's investment
program as described herein, including, without limitation,
analysis of Portfolio performance.
The Sub-Adviser shall also furnish the Manager with any and all other reports
regarding the management of the Portfolio reasonably requested by the Manager in
accordance with or described in this Agreement. The Sub-Adviser will keep the
Fund and the Manager informed of developments materially affecting the
management of the Portfolio, and will furnish the Fund and the Manager from time
to time with such information as Sub-Adviser believes, in its discretion, is
appropriate for this purpose. The Sub-Adviser also agrees to attendance by
appropriate representatives of the Sub-Adviser at meetings reasonably requested
by the Manager or the Fund's Trustees at such times and locations as reasonably
requested by the Manager or the Trustees.
c. The Sub-Adviser will assist the record-keeping agent for
the Fund in determining or confirming the value of any securities or other
assets in the Portfolio for which the record-keeping agent reasonably requests
review by the Sub-Adviser. The parties agree that, consistent with applicable
law, the Sub-Adviser will not bear any responsibility or liability in connection
with the determination or confirmation of values of any such securities or other
assets in the Portfolio.
d. Upon reasonable notice, the Sub-Adviser shall permit the
books and records with respect to the Portfolio to be inspected and audited by
the Manager and the Fund (and/or the independent accountants for the Fund) at
all reasonable times during normal business hours. The Sub-Adviser agrees that
such records are the property of the Fund and shall be promptly surrendered to
the Fund or the Manager, as agent of the Fund, upon request; provided, however,
that the Sub-Adviser is authorized to maintain a copy of any such records.
e. The Sub-Adviser will cooperate (in establishing proxy
handling procedures acceptable to Manager) with such authorized
representative(s) of the Fund granted authority to vote proxies solicited by or
with respect to the issuers of securities in which Portfolio assets are
invested.
f. The Sub-Adviser will be responsible for the preparation and
filing of Schedule 13G and Form 13F with respect to the assets of the Portfolio.
g. The Sub-Adviser shall provide to the Manager a copy of its
Form ADV as filed with the Securities and Exchange Commission and as amended
from time to time and a list of the persons whom the Sub-Adviser wishes to have
authorized to give written and/ or oral instructions to custodians of assets of
the Portfolio.
2. Obligations of the Manager.
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a. The Manager shall provide (or cause the Fund's custodian to
provide) timely information to the Sub-Adviser regarding such matters as the
composition of assets of the Portfolio, cash requirements and cash available for
investment in the Portfolio, and all other information as may be reasonably
necessary for the Sub-Adviser to perform its responsibilities hereunder. In this
regard, the Manager will deliver to the Sub-Adviser any limitations imposed upon
the Portfolio as a result of relevant diversification requirements under the
provisions of Section 817(h) of the Internal Revenue Code of 1986, as amended,
as well as any subsequent amendments to such limitations.
b. The Manager has furnished the Sub-Adviser a copy of the
prospectus and statement of additional information of the Portfolio and agrees
during the continuance of this Agreement to furnish the Sub-Adviser copies of
any revisions or supplement thereto at, or, if practicable, before the time the
revisions or supplements become effective. No revisions shall be made nor
supplements issued regarding the Portfolio or the Sub-Adviser without the prior
review and approval of the Sub-Adviser. No written materials naming or relating
to the Sub-Adviser, its employees or its affiliated companies, other than
materials provided or approved by the Sub-Adviser, shall be use by the Manager,
the Fund or their affiliates in offering or marketing shares of the Fund. The
Manager agrees to furnish the Sub-Adviser with minutes of meetings of the
Directors of the Fund applicable to the Portfolio to the extent they may affect
the duties of the Sub-Adviser, and with copies of any financial statements or
reports made by the Portfolio to its shareholders, and any further materials or
information which the Sub-Adviser may reasonably request to enable it to perform
its functions under this Agreement.
3. Custodian. The Manager shall provide the Sub-Adviser with a
copy of the Fund's agreement with the custodian designated to hold the assets of
the Portfolio (the "Custodian") and any modifications thereto (the "Custody
Agreement"), copies of such modifications to be provided to the Sub-Adviser a
reasonable time in advance of the effectiveness of such modifications. The
assets of the Portfolio shall be maintained in the custody of the Custodian
identified in, and in accordance with the terms and conditions of, the Custody
Agreement (or any sub-custodian properly appointed as provided in the Custody
Agreement). The Sub-Adviser shall have no liability for the acts or omissions of
the Custodian unless such act or omission is required by and taken in reliance
upon instruction given to the Custodian by a representative of the Sub-Adviser
properly authorized to give such instruction under the Custody Agreement. Any
assets added to the Portfolio shall be delivered directly to the Custodian.
4. Expenses. Except for expenses specifically assumed or agreed
to be paid by the Sub-Adviser pursuant hereto, the Sub-Adviser shall not be
liable for any expenses of the Manager or the Fund including, without
limitation, (a) interest and taxes, (b) brokerage commissions and other costs in
connection with the purchase or sale of securities or other investment
instruments with respect to the Portfolio, and (c) custodian fees and expenses.
The Sub-Adviser will pay its own expenses incurred in furnishing the services to
be provided by it pursuant to this Agreement.
5. Purchase and Sale of Assets. Absent instructions from the
Manager to the contrary, the Sub-Adviser shall place all order for the purchase
and sale of securities for the Portfolio with brokers or dealers selected by the
Sub-Adviser, which may include brokers or dealers affiliated with the
Sub-Adviser, provided such orders comply with Rule 17e-1 under the 1940 Act. To
the extent consistent with applicable law, purchase or sell orders for the
Portfolio may be aggregated with contemporaneous purchase or sell orders of
other clients of the Sub-Adviser. The Sub-Adviser shall use its best efforts to
obtain execution of transactions for the Portfolio at prices which are
advantageous to the Portfolio and at commission rates that are reasonable in
relation to the benefits received.
6. Compensation of the Sub-Adviser. As full compensation for all
services rendered, facilities furnished and expenses borne by the Sub-Adviser
hereunder, the Manager shall pay the Sub-
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Adviser compensation at the annual rate of 0.55% of the average aggregate daily
assets of the Portfolio up to $150 million, 0.45% of the Portfolio's assets
between $150 million and $300 million, and 0.40% of the Portfolio's assets in
excess of $300 million. Such compensation shall by payable monthly in arrears or
at such other intervals, not less frequently than quarterly, as the Manager is
paid by the Portfolio pursuant to the Advisory Agreement. The Manager may from
time to time waive the compensation it is entitled to receive from the Fund,
however, and such waiver will have no effect on the Manager's obligation to pay
the Sub-Adviser the compensation provided for herein.
7. Non-Exclusivity. The Manager and the Portfolio agree that the
services of the Sub-Adviser are not to be deemed exclusive and that the
Sub-Adviser and its affiliates are free to act as investment manager and provide
other services to various investment companies and other managed accounts,
except as the Sub-Adviser and the Manager or the Administrator may otherwise
agree from time to time in writing before or after the date hereof. This
Agreement shall not in any way limit or restrict the Sub-Adviser or any of its
directors, officers, employees or agents from buying, selling or trading any
securities or other investment instruments for its or their own account or for
the account of others for whom it or they may be acting, provided that such
activities do not adversely affect or otherwise impair the performance by the
Sub-Adviser of its duties and obligations under this Agreement. The Manager and
the Portfolio recognize and agree that the Sub-Adviser may provide advice to or
take action with respect to other clients, which advice or action, including the
timing and nature of such action, may differ from or be identical to advice
given or action taken with respect to the Portfolio. The Sub-Adviser shall for
all purposes hereof be deemed to be an independent contractor and shall, unless
otherwise provided or authorized, have no authority to act for or represent the
Fund or the Manager in any way or otherwise be deemed an agent of the Fund or
the Manager.
8. Liability. Except as may otherwise be provided by the 1940
Act or other federal securities laws, neither the Sub-Adviser nor any of its
affiliates or its or their officers, directors, employees or agents (the
"Indemnified Parties") shall be subject to any liability to the Manager, the
Fund, the Portfolio or any shareholder of the Portfolio or the Fund for any
error of judgment, any mistake of law or any loss arising out of any investment
or other act or omission in the course of, connected with, or arising out of any
service to be rendered under this Agreement, except by reason of willful
misfeasance, bad faith or gross negligence in the performance of the
Sub-Adviser's duties or by reason of reckless disregard by the Sub-Adviser of
its obligations and duties. The Manager shall hold harmless and indemnify the
Sub-Adviser for any loss, liability, cost, damage or expense (including
reasonable attorneys fees and costs) arising from any claim or demand by any
past or present shareholder of the Portfolio or the Fund that is not based upon
the obligations of the Sub-Adviser with respect to the Portfolio under this
Agreement. The Manager acknowledges and agrees that the Sub-Adviser makes no
representation or warranty, express or implied, that any level of performance or
investment results will be achieved by the Portfolio or that the Portfolio will
perform comparably with any standard or index, including other clients of the
Sub-Adviser, whether public or private.
9. Effective Date and Termination. This Agreement shall become
effective as of the date of its execution, and
a. unless otherwise terminated, this Agreement shall continue
in effect for two years from the date of execution, and from year to year
thereafter so long as such continuance is specifically approved at least
annually (i) by the Board of Directors of the Fund or by vote of a majority of
the outstanding voting securities of the Portfolio, and (ii) by vote of a
majority of the directors of the Fund who are not interested persons of the
Fund, the Manager or the Sub-Adviser, cast in person at a meeting called for the
purpose of voting on such approval;
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b. this Agreement may at any time be terminated on sixty days'
written notice to the Sub-Adviser either by vote of the Board of Directors of
the Fund or by vote of a majority of the outstanding voting securities of the
Portfolio;
c. this Agreement shall automatically terminate in the event
of its assignment or upon the termination of the Advisory Agreement; and
d. this Agreement may be terminated by the Sub-Adviser on
sixty days' written notice to the Manager and the Fund, or, if approved by the
Board of Directors of the Fund, by the Manager on sixty days' written notice to
the Sub-Adviser.
Termination of this Agreement pursuant to this Section 9 shall be
without the payment of any penalty.
10. Amendment. This Agreement may be amended at any time by mutual
consent of the parties, provided that, if required by law, such amendment shall
also have been approved by vote of a majority of the outstanding voting
securities of the Portfolio and by vote of a majority of the directors of the
Fund who are not interested persons of the Fund, the Manager or the Sub-Adviser,
cast in person at a meeting called for the purpose of voting on such approval.
11. Certain Definitions. For the purpose of this Agreement, the
terms "vote of a majority of the outstanding voting securities," "interested
person," " affiliated person" and "assignment" shall have their respective
meanings defined in the 1940 Act, subject, however, to such exemptions as may be
granted by the Securities and Exchange Commission under the 1940 Act.
12. General.
a. The Sub-Adviser may perform its services through affiliate,
employee, officer or agent, and the Manager shall not be entitled to the advice,
recommendation or judgment of any specific person; provided, however, that the
persons identified in the prospectus of the Portfolio shall perform the
portfolio management duties described therein until the Sub-Adviser notifies the
Manager that one or more other affiliates, employees, officers or agents
identified in such notice shall assume such duties as of a specific date.
b. If any term or provision of this Agreement or the
application thereof to any person or circumstances is held to be invalid or
unenforceable to any extent, the remainder of this Agreement or the application
of such provision to other persons or circumstances shall not be affected
thereby and shall be enforced to the fullest extent permitted by law.
c. Each party hereto agrees that information obtained from the
other during the course of this Agreement will only be used in furtherance of
performance of its obligations under this Agreement; provided, however, that
this clause shall not apply to information specifically authorized for another
use by the providing party or information that is otherwise available to the
public.
d. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York.
13. Notice. All notices or other communications required or
permitted to be given hereunder shall be in writing and shall be delivered or
sent by pre-paid first class mail to the following addresses or
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to such other address as the relevant party shall hereafter notify for such
purpose to the other by notice in writing, and shall be deemed to have been
given at the time of delivery.
If to the Manager: PHOENIX VARIABLE ADVISORS, INC.
Xxx Xxxxxxxx Xxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxx
If to the Sub-Adviser: XXXXXX XXXXXXX XXXX XXXXXX INVESTMENT
MANAGEMENT INC.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
14. Use of Xxxxxx Xxxxxxx Name. The Manager and the Fund agree
that if this Agreement is terminated and the Sub-Adviser or an affiliate thereof
shall no longer be the sub-adviser to the Portfolio, the Fund will change the
name of the Portfolio to delete any reference to "Xxxxxx Xxxxxxx" or any portion
or combination thereof.
PHOENIX VARIABLE ADVISORS, INC.
By:______________________________
Name:
Title:
XXXXXX XXXXXXX XXXX XXXXXX
INVESTMENT MANAGEMENT INC.
By:______________________________
Name: ___________________________
Title: __________________________
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